May
04

The Basics of a Sale-Leaseback

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Low interest rates are creating a compelling argument for sale-leaseback financing. Sale-leasebacks are often viewed as an alternative financing source that is attractive to non-rated or below-investment-grade companies that are hungry for capital. Yet, sale-leasebacks are active across the board — from “A” rated public companies to smaller mid-size firms.

The low-interest-rate environment, coupled with strong investor demand for quality properties, is helping to fuel transactions. For example, New York-based W.P. Carey & Co. had a record year in 2011, completing $1.2 billion in sale-leaseback investments. The investor typically acquires office, industrial, and retail facilities both in the United States and around the globe. “We’re seeing tons of deals this year, and we think we’re going to have another big year,” says Gino Sabatini, managing director and co-head of Domestic Investments at W. P. Carey.

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