Description
Sale-leaseback transactions provide the seller/lessee access to capital tied up in real estate assets without the underwriting and legal constraints of mortgage financing. Leases can be structured with longer-term, fixed payments and effectively higher leverage than conventional loans, allowing for potential tax benefits not available with mortgage loans.
For the investor/lessor, the sale-leaseback provides the opportunity to acquire commercial real estate that comes with a long-term, credit-worthy tenant under a triple net lease. The credit quality of the tenant and the condition of the property are primary concerns for the investor.
One disadvantage for the seller is the loss of flexibility as owner-occupant. Lease negotiations over potential limitations for the seller can be contentious. Some tenant-friendly lease provisions will need to be subordinated to a future mortgage or ground lease, making SNDA requirements critical to the negotiation. The seller/lessee must be mindful of the accounting treatment of the lease under the accounting standards that went into effect in 2018.
Listen as Jeff Tracy, Associate Director at Stan Johnson Company, discusses sale-leaseback market trends, advantages and pitfalls for sellers and investors, deal structures and terms, and best practices for the parties to protect their interests.
Presented By
Mr. Tracy specializes in offering sale leaseback and real estate advisory services to corporations, investment banks, private equity funds, franchisees, developers, and family offices through the disposition, acquisition, and capitalization of net lease office, industrial, and retail properties nationwide. Relying on his legal, M&A, and corporate background, Mr. Tracy provides the highest level of service in a wide array of disciplines by combining his industry knowledge and experience with a full understanding of each client’s goals and objectives.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, June 21, 2022
- schedule
1:00 p.m. ET./10:00 a.m. PT
- Current market trends in sale-leaseback transactions
- Advantages and pitfalls for both seller/tenants and buyer/investors
- Importance of a credit-worthy tenant
- Deal structures and terms
- Key lease provisions to protect the interests of all parties
- The new tax accounting rules for leases
The panelist will review these and other essential questions:
- What are market conditions driving the increase in sale-leaseback activity?
- What deal structures are generally used for sale-leaseback transactions?
- What is the tax treatment of sale-leaseback transactions?
- What are the tenant's objectives concerning subordination to the mortgage, and what rights should they seek to negotiate in SNDA provisions?
