A sale-leaseback is a transaction in which an owner-operator sells its real estate and leases it back at the same time, freeing capital while staying in place.
In a sale-leaseback a business sells its building to an investor and signs a long-term lease to stay. The company converts real estate equity to cash for growth or debt payment, and the investor gets a tenant with an operating history in the location. For buyers, the key points are the company's credit, the lease length and rent, and whether the rent is set at a market level. Because the seller and tenant are the same party, the lease terms are especially important.