Case Studies
Here are some examples that can help understand the context and background of Sale Leasebacks and the benefits they add to your business. We are prepared to provide real solutions in many different markets. Thanks in large part to the sale lease back transaction, businesses are able to remain competitive and profitable while expanding operations.
Sale Leaseback: Auto Dealership Group Midwest
In September 2022, a major Midwest auto dealership group completed a sale leaseback transaction for the majority of its real estate portfolio with a value of $95 million. The sale included several automotive dealerships and properties. The transaction allowed the group to immediately realize the proceeds from the sale to fund dealership growth and development in different states throughout the Midwest. The sale leaseback transaction allowed them to gain liquidity without disrupting its operational efficiencies. It also provided the group with greater financial flexibility in the form of an immediate influx of capital. Through the sale, the group was able to refinance existing debt while also reducing certain covenants relating to leverage and other financial issues. This allowed the group to operate more efficiently without increased restrictions placed on them by lenders and other creditors.
Sale Leaseback: Medical Office Building
A Medical Group with their building located in in the southeast experienced financial struggles due to slow payments from insurance companies and rising costs. To address their cash flow concerns, they explored financing options and ultimately decided to pursue a sale lease back transaction. They engaged a lender that was experienced in sale leasebacks and was able to quickly receive the cash they needed to stay afloat. The cash injection from the sale lease back allowed them to make necessary investments and increase their competitiveness in the market.
Sale Leaseback: Hotel
A hotel chain used a sale-leaseback transaction to secure financing for a new property. The chain sold an existing hotel for a purchase price of $10 million and then leased it back for a period of 10 years. The terms of the lease included monthly payments of $80,000, with a balloon payment at the end of the term. The sale-leaseback transaction enabled the hotel chain to access the capital from the sale of the property, while still maintaining ownership. This freed-up capital was then used to purchase a new hotel property, allowing the hotel chain to expand its operations. The sale-leaseback transaction also allowed the hotel chain to manage cash flow more effectively, while still maintaining operations of the asset.
Sale Leaseback: Cannabis Operation
A cannabis operation used a sale leaseback transaction to secure financing for expansion. The company sold an existing grow facility for a purchase price of $4 million and then leased it back for a period of five years. The terms of the lease included monthly payments of $30,000, with a balloon payment at the end of the term. The sale leaseback transaction enabled the cannabis operation to access the capital from the sale of the grow facility, while maintaining control of business operations. This freed-up capital was then used to purchase new grow facilities, allowing the company to expand its operations. The sale leaseback transaction also allowed the cannabis operation to manage cash flow more effectively.
Sale Leaseback: Mid-sized Manufacturing Company
The company needed to raise capital for expansion and decided to pursue a sale leaseback transaction for one of its assets. The asset was appraised and valued at $2 million and the company was able to negotiate a purchase price of $1.8 million. The terms of the sale-leaseback agreement included an initial down payment of $100,000, followed by monthly payments of $50,000 over the course of the three-year lease. The company was able to complete the transaction quickly and efficiently, and the capital raised allowed them to expand their operations. The company was also the manager of the asset, while still receiving the benefits of a sale leaseback transaction.
Sale Leaseback: Personal Financial Benefit Small Business Owner
A small business owner used a successful sale-leaseback transaction to free up capital for other investments. The business owner was able to sell an asset for a purchase price of $500,000 and then lease it back for a monthly payment of $3,000. This allowed the business owner to access the capital from the sale of the asset, while managing operations. The freed-up capital was then used to invest in other projects, which resulted in a personal financial benefit for the business owner. This successful sale leaseback transaction enabled the business owner to access capital, while still managing and operating the asset.
