U.S.
ICSC Las Vegas Preview
ICSC Las Vegas, one of the largest commercial real estate gatherings, will again convene the industry’s leading professionals and retailers next week. Over 30,000 attendees will gather for networking, deal-making and insights into how the retail real estate industry will fare amid a volatile and uncertain economic environment. Tariffs, shifts in consumer sentiment and sale-leaseback opportunities will be among the biggest topics discussed at the conference. Outlined below is an overview of each. Tariffs add pressure and uncertainty for retailers Uncertainty surrounding tariffs is expected to have a substantial impact on the retail real estate industry. The National Retail Federation announced it expects the growth of U.S. retail sales to slow down this year due to consumer anxiety and inflation, with an outsized impact on smaller retailers and certain industries including textiles and electronics. While the long-term impact of tariff policies is unclear, retailers ultimately will have to determine how much of the additional costs they can absorb versus passing on to consumers. These decisions could have significant impacts on retailers’ balance sheets and ability to remain operational, affecting overall investment in the sector. Consumer sentiment shifts will impact investor demand Shifting consumer preferences continue to present both opportunities and challenges for retailers. Uncertainty surrounding the future of the economy has made consumers more budget conscious and focused on necessities. According to the U.S. Bureau of Economic Analysis, essential goods account for 65% of consumer spending. As a result, retailers will likely continue to show interest in grocery-anchored shopping centers, which continue to remain among the best-performing retail property types. E-commerce also continues to redefine retail. As more consumers shift their spending online, retailers like Macy’s are consolidating locations and shrinking their footprints. For investors seeking stability, this means targeting markets with strong population and job growth—where retail assets are most likely to perform well over the long term. Sale-leasebacks remain a viable financing option Despite economic uncertainty, the retail sale-leaseback market continues to grow—thanks to its clear advantages over traditional debt. By unlocking the full market value of their real estate, retailers can reinvest proceeds into their core business and drive stronger returns. Sale-leasebacks also provide long-term capital with no refinancing risk and typically without the restrictive debt covenants or balloon payments that come with conventional financing. In today’s climate, where liquidity and balance sheet flexibility are paramount, that kind of stability is more valuable than ever.
The Future of Net Lease Retail
Retail investors in 2025 face shifting market conditions, including tariff concerns, interest rate volatility, higher construction costs, and increased institutional competition. According to Michael Fitzgerald, executive director and head of US retail investments at W. P. Carey, these forces will continue to influence retail investments in the months ahead. “You have many factors pushing cap rates in different directions, with new entrants and fresh capital coming into the market,” says Fitzgerald. “That increased demand naturally drives rates down. But at the same time, rising 10-year interest rates and investors trying to protect their spread are pushing cap rates up. In the end, we’ve actually seen some stability since this time last year.” Still, in the current conditions, investors are reassessing how they evaluate risk, structure leases, and identify long-term value. Pressure Points Grow Rising construction and financing costs as well as the increasing cost of imported goods have become pressure points across the sector. According to Fitzgerald, those costs translate to higher rents, especially for new sale-leaseback deals. Even with those increases, Fitzgerald emphasizes that the need to ensure profitability still holds up at the store level. “We need to make sure the metrics still make sense,” he says. Additionally, inflation has made flat leases a tough sell for investors. “It’s fair to say the age of flat leases is over,” adds Fitzgerald. “Outside of grocery, there’s really not much appetite for retail leases with flat escalations.” Sale-leaseback Opportunities Remain Despite these headwinds, the retail sale-leaseback market has continued to see growth because the structure has basic advantages over other forms of financing. Sale-leasebacks offer long-term capital with no refinancing risk and typically without the restrictive debt covenants or balloon payments of traditional debt. As a result, companies that need capital and have a real estate footprint will continue to tap this form of financing despite overall higher cap rates. According to Fitzgerald, the best candidates for sale-leasebacks are growing retailers in healthy retail segments. This includes companies that provide discount non-discretionary products and services, convenience stores, service-based segments and fitness. How Disciplined Investors Move Forward When evaluating retail assets, Fitzgerald emphasizes the EBITDAR-to-rent ratio as a key metric. “It’s the single most important metric for understanding whether a retail location is a good long-term investment. Locations with a history of consistent profit will tend to stay open and can support a fair amount of rent.” Beyond that, Fitzgerald highlights that W. P. Carey also looks at the rent relative to market and the cost basis of the property relative to its construction cost or replacement cost. The corporate credit profile also plays a major role. Fitzgerald emphasizes he often looks for companies with strong credit, market leadership, conservative capitalization, solid management, a proven track record of success, and a conservative approach to growth. “W. P. Carey has a strong history of smart credit underwriting, and in some cases, our deep understanding of credit allows us to pursue investment ideas others will not.” Despite changing market conditions, Fitzgerald believes disciplined investors still have room to thrive. For instance, he points to W. P. Carey’s access to capital, as well as their overall balance sheet strength. “We are differentiated by our large balance sheet that allows us to make all-cash offers at large scale without any financing contingencies. This enables us to consistently offer certainty of close, which is often the most important factor sellers point to when choosing a sale-leaseback partner.”
Financing Sustainable Real Estate Through Sale-leasebacks
Financing sustainable building upgrades can be a daunting and expensive endeavor for many businesses. The upfront costs associated with sustainable materials, energy-efficient systems and eco-friendly designs often deter companies from pursuing these environmentally beneficial projects, even when they know there are long-term cost savings. Sale-leasebacks offer an effective solution to this challenge. By selling their real estate to an investor and leasing it back, companies can unlock capital which they can invest in sustainability upgrades, improving the quality of their building and often lowering operating costs. Landlords, like W. P. Carey, are also typically supportive of sustainability-focused building upgrades as they increase the overall value of the building. Here are several ways companies can leverage sale-leaseback financing to make their buildings more sustainable. Solar panel installations and green roofs One of the most effective sustainable upgrades for commercial facilities is installing solar panels on a roof or carport. Solar panels provide a clean source of energy and can help companies save on power costs. They also reduce over-reliance on the grid during peak periods when electricity demand is high and clean up the grid, providing a renewable and cost-effective alternative to fossil fuels. Depending on the location, companies may also be able to receive Renewable Energy Credits (RECs) or Guarantees of Origin (GOs). Another sustainable upgrade that can provide both environmental and economic benefits is a green roof, also known as vegetated or living roof. These are roof systems covered with waterproofing membrane, soil and vegetation. Green roofs can significantly improve stormwater management, reduce urban heat island effect, boost biodiversity by providing a habitat for plants and animals, and improve building energy efficiency. Both solar panels and green roofs are a great way to make a building more sustainable and help reduce energy costs for the tenant, but they require significant investment. By utilizing sale-leaseback financing, companies can easily unlock the capital they need to invest in these improvements. Sustainable construction For companies who are looking for a brand-new building and want to prioritize sustainability, a build-to-suit, which uses the sale-leaseback structure, is a great solution. Through a build-to-suit, a company can secure a custom-built, sustainable facility without the upfront capital investment. An investor funds and manages the construction of the new facility to meet the specifications of the future tenant, and upon completion, the company enters into a long-term lease. During the build-to-suit planning, companies can specify that they want to utilize sustainable construction, which means using recyclable and renewable materials during the building process as well as minimizing energy consumption and waste production. In addition, the building can be designed to minimize its carbon footprint by incorporating elements and materials that have a continuous positive influence on the environment. These features can include electric-vehicle charging stations, drought-resistant landscaping, heat pumps, appropriate insulation to prevent heat loss and greywater recycling. Energy-efficiency upgrades Implementing sustainable features to improve energy efficiency significantly impacts a property's life-cycle emissions. These upgrades are often relatively easy to implement but can be costly to install. By unlocking capital through a sale-leaseback, companies can extract the cash they need to invest in these improvements, making their building more sustainable and saving on energy costs in the long run. One example of an energy-efficiency upgrade is installing Internet of Things (IoT) technology, including smart meters, which help companies manage building efficiency on a daily basis. IoT sensors can gather information on energy consumption, temperature, air quality and occupancy levels, enabling tenants to best optimize the efficiency of their buildings. Companies can also leverage the capital from a sale-leaseback for building systems upgrades. Upgrading an outdated heating, ventilation and air conditioning (HVAC) system can help decrease utility consumption and create maintenance cost savings for the tenant. W. P. Carey can help While the financial burden of sustainable building upgrades can be substantial, sale-leasebacks provide a viable and strategic solution. Embracing this approach allows companies to align their environmental goals with their economic objectives, paving the way for a greener and more prosperous future. W. P. Carey is one of the largest net lease real estate investors and has significant experience working with companies on sale-leasebacks and sustainability solutions. If you’re interested in learning more, contact us today!
Net Lease Investors Adapt as Economic Uncertainty Lingers
Tariffs, interest rate fluctuations and macroeconomic uncertainties continue to reshape the net lease investment market. As these factors evolve, investors are working to make long-term decisions in an uncertain environment. “There’s a lot of volatility, especially around tariffs and trade policy,” says Jason Patterson, executive director of investments at W. P. Carey. “It’s difficult for a CFO or CEO to commit to a 20-year lease when so many of these factors are changing day to day.” This unpredictability has tempered deal volume, but as conditions stabilize, Patterson expects a resurgence in activity later in the year. The Impact of Interest Rate Volatility Interest rates have been a focal point for investors, particularly given their impact on pricing and transaction volumes. While rates have been trending downward recently, the past year has seen continued fluctuations, making it challenging for buyers and sellers to align on pricing expectations. “Investors really track the 10-year US Treasury as a guidepost for risk and pricing,” Patterson says. “The volatility we’ve seen has widened the bid-ask gap in many cases, making it harder for deals to come together.” He notes that as interest rates stabilize, market conditions should improve, leading to increased deal flow. Sale-Leasebacks Still Attractive Alternative to Unlocking Capital Uncertain economic conditions often prompt corporate real estate owners to explore sale-leaseback transactions as a means of unlocking capital. While Patterson hasn’t seen a major uptick yet, he expects that to change as 2025 progresses. “There are early signs of increased sale-leaseback activity,” Patterson says. “While we haven’t seen a huge spike just yet, M&A activity has been improving, and sale-leaseback volume often follows that trend.” He also notes that while uncertainty can sometimes deter companies from making long-term commitments, it can also push them toward alternative capital options, such as sale-leasebacks, to improve liquidity. Preparing for What’s Next With so much uncertainty, investors are focusing on proactive strategies to reduce risk and position themselves for long-term success. According to Patterson, much of this work happens upfront, from structuring leases with protective provisions to ensuring asset selection aligns with long-term needs. “The good thing about net leases is that once you’ve bought a building and signed a lease, there’s an expectation of long-term stability and predictability,” he explains. “The key is making sure those early decisions — such as lease structuring and tenant selection — are as strong as possible.” Active asset management also plays an important role. Maintaining strong relationships with tenants, tracking performance and being flexible with their needs can help investors handle potential challenges in the future. While economic uncertainty continues to persist, investors who remain disciplined and adaptable will be well positioned for success, and Patterson remains optimistic about the net lease market in the months ahead. “I don’t see an impending cliff or major downturn,” he says. “The best approach is to stay informed, track policy changes and make smart, forward-looking decisions.”
Will the Net Lease Market Thrive in 2025?
The net lease industry has faced significant challenges in recent years, grappling with widespread economic uncertainty, soaring inflation and elevated interest rates leading to muted growth. However, a turning point came in the second half of 2024, when the Federal Reserve began cutting interest rates, ushering in lower cost debt and injecting some optimism into the market. While most industry experts believe net lease is poised for an upswing in 2025, the extent of the recovery remains in question. As the industry gears up to “thrive in ‘25”, here are three predictions for the year ahead. Transaction volume will likely increase, but uncertainty around interest rates will remain After three rate cuts by the Federal Reserve last year, real estate investors have gained more confidence in the market, signaling the beginning of a turnaround for transaction volume. Colliers latest outlook forecasts a 25-33% growth in aggregate volume in 2025, driven by a strong economy, improving fundamentals and growing demand for key asset classes. The bid-ask spread between buyers and sellers will also continue to narrow in 2025, supporting more robust investment activity. However, the predicted boost in transaction volume is largely tied to the future of interest rates which is uncertain. The timing and pace of further rate decisions will depend on many factors, including the impact of the incoming administration’s policies – mainly surrounding tariffs and immigration – on inflation. Net lease investors will explore new property types as technology and innovation drive trends Shifting economic factors and trends will also likely lead to a change in where net lease investors will look to allocate their capital. One of the fastest growing sectors over the past year has been data centers, which have seen a huge uptick in demand because of growing digital infrastructure needs and the advent of artificial intelligence. The average vacancy rate among primary North American data center markets in 2024 hit a record low of 2.8%, according to CBRE. The firm also forecasts the average preleasing rate for data centers to rise to 90% or more in 2025. Another sector to watch is healthcare, with an aging population, growing healthcare spending and new technologies supporting increased investor demand. In particular, medical outpatient buildings are well-positioned to benefit from these trends, in addition to shifting consumer preferences for accessing healthcare in more convenient locations. Industrial and retail will remain steady as positive tailwinds support demand Despite new sectors potentially drawing investor interest, the net lease sector will remain underpinned by two of its core property types – industrial and retail. Driven by e-commerce needs, warehouses and other industrial real estate properties are still in demand. In Q3 2024, industrial vacancy rates dipped slightly to 6.7%, according to Moody’s CRE. Furthermore, changes in trade policy will likely boost demand for industrial facilities near the U.S.-Mexico border – bolstering markets such as San Antonio, Austin and Dallas/Fort Worth. Retail enters the new year with the lowest vacancy rate of any commercial real estate sector and will remain steady throughout 2025. Demand for retail continues to be primarily driven by location – with assets in densely populated areas garnering the most investor interest. Increased consumer spending as a result of easing inflation will also be a positive tailwind for retail growth in 2025.
Lease Accounting 101
Classifying leases as finance or operating is fundamental to how companies manage leased assets and report them under today’s U.S. GAAP standards. Regardless of whether a company is entering into a traditional lease or a sale-leaseback, understanding the distinctions is essential for accurate financial reporting and decision-making. What is a finance lease? Leases are classified as ‘finance’ when they have characteristics that make them similar to financing the purchase of the underlying asset. To qualify as a finance lease, one or more of the following criteria must be met: Transfer of Ownership: Ownership transfers to the lessee at the end of the lease Lease Purchase Option: The lessee has an option to buy the asset (and likely will) Lease Term: The lease term represents most of the asset’s remaining economic life (typically 75% or more) Present Value: The present value of the lease payments (and any residual value guarantee) is equal to or exceeds substantially all of the asset’s fair market value (typically 90% or more) Under a finance lease, the lessee is deemed to have control over the asset. As such, finance leases are accounted for as if the lessee has ownership of the asset. Accordingly, the lessee recognizes the rent expense as a bifurcated expense between interest expense and depreciation on the income statement as well as a right-of-use asset and lease liability on the balance sheet. Given the nature of the arrangement, finance leases require careful consideration due to the impact on said financial statements. What is an operating lease? An operating lease is much more like a typical lease arrangement, where the lessor permits the lessee to utilize an asset for a set period of time. Under older accounting standards, these assets and related liabilities were not recorded on balance sheet, but that changed in 2016 with ASC 842, in which lessees are now required to bring operating leases on their balance sheet. Leases are categorized as operating if none of the four criteria for finance leases listed above are met. With an operating lease, ownership is not transferred at the end of the lease period. This carries with it the risk that when the lease term ends, a company may be asked to leave or offered unfavorable terms to renew the lease. However, this could also be a plus if the company is looking to move locations. On financial statements, operating leases are accounted for as a right-of-use asset and a lease liability, with all rent expense being recorded as an operating cost. Special considerations for sale-leasebacks Sale-leasebacks have an added layer to consider. For the transaction to qualify as a true sale under ASC 842, the sale-leaseback must be classified as an operating lease. If it is classified as a finance lease for any of the reasons above, it is treated as a ‘failed sale.’ When the sale fails, the seller/lessee: Does not derecognize the asset on its balance sheet and instead records the proceeds as a loan Pays down the loan through lease payments, which are split into principal and interest expense. The interest rate is based on the seller’s incremental borrowing rate W. P. Carey can help Understanding the differences between finance and operating leases is crucial for businesses, especially those considering a sale-leaseback. With both lease types now displayed on balance sheet, it’s important for companies to understand the nuances of each so they can best adhere to accounting standards and make well-informed decisions about their lease agreements. For a deeper breakdown into lease accounting, take a look at Lease Accounting: IFRS vs. US GAAP. In this article, we explore the key differences in lease classification, measurement and presentation under IFRS 16 and ASC 842 and go into more detail on the implications of failed sale accounting for buyers and sellers. W. P. Carey has more than 50 years of experience executing sale-leasebacks and helping companies structure customized leases that make the most sense for their business. While W. P. Carey can help, lessees should consult their accounting professional to address their specific needs.
Net Lease Investors Eye Cross-Border Opportunities and New Property Types in 2025
The net lease market is positioned for change in 2025, with investors monitoring trends in geographic expansion and property types, as well as shifting economic factors. While the US remains a key market for many, international opportunities are gaining ground, particularly in Mexico, as noted by Tyler Swann, managing director of investments at W. P. Carey. “Mexico is a market we’ll be watching closely next year,” says Swann. “We’re seeing more sale-leaseback and build-to-suit opportunities there, particularly as more American and International manufacturers set up shop in the country.” Alongside these international prospects, investors are exploring new property types and preparing for economic factors like ongoing interest rate volatility and tariffs. By keeping an eye on these trends, investors can better position themselves for what’s next, says Swann. Geographic Expansion and Emerging Property Types While the US and Europe remain the cornerstone of net lease investment for W. P. Carey, Swann is monitoring other international markets, such as Mexico and Canada, for growth. “Our largest transaction in 2023 was in Canada,” he says. The country’s interest rates differ from those in the US, and Swann is keeping a close watch on how this impacts market pricing with an eye to expanding further if the opportunity exists. New opportunities in 2025 aren’t limited to geography, Swann notes. Some non-traditional property types are also getting a look from the net lease world. “We’re seeing more activity from net lease investors in the data center world,” says Swann. “Clearly, there’s a need for a tremendous amount of capital to fund the buildout of these new data centers.” However, he adds that W. P. Carey takes a selective approach, focusing on long-term leases to single tenants to ensure returns comparable to the company’s core industrial investments. Healthcare properties, particularly those in prime locations, are also attracting attention. “To the extent that we can find those well-located healthcare assets, I think that‘s something we’ll explore in 2025,” says Swann. Swann sees the key criteria for healthcare investments to be their proximity to population centers with favorable demographic trends and the asset’s importance to the local community. Continued Interest Rate Volatility and an Unpredictable Market As the net lease market heads into 2025, interest rate volatility remains a key concern for investors. Recent fluctuations in long-term Treasury rates have had a direct impact on asset pricing and overall investment strategies. “Long-term financing rates are also critical for how we price assets with long-term leases,” says Swann. “The uncertainty surrounding interest rates is compounded by economic factors, including potential deficit spending and the risks of future inflation.” Looking ahead, investors will need to remain flexible, evaluating opportunities, property types, and the broader economic trends to stay ahead of market shifts. “Interest rate volatility can actually benefit public REITs like W. P. Carey,” Swann notes. “We’re less sensitive to rate movements, which allows us to close deals even in volatile environments.”
What’s Next for Commercial Real Estate?
After several challenging years contending with the impacts of a global pandemic, the commercial real estate market finally seems to be healing. As noted in the latest Emerging Trends in Real Estate report from PwC and the Urban Land Institute, the Fed's 50-basis-point cut in September and subsequent 25-basis-point cut in November have generated some optimism in the CRE community that we are entering a new expansionary phase in the real estate cycle. Here are four of the top emerging trends taking shape as a result. 1. Interest Rates and Capital Cost Concerns Have Eased, but Still Remain In the aftermath of the global financial crisis of 2007-2008, the Fed attempted to revive the economy by lowering the federal funds rate to near zero. What followed was nearly a decade in which cheap debt became a way of life. However, starting in the spring of 2022, with inflation surging, the federal funds rate was increased 11 times, pushing the rate from zero to over 5 percent, bringing real estate investment activity to a near standstill. Reflecting on the market today, interest rates and cost of capital remain among the top concerns of respondents to the PwC Emerging Trends in Real Estate survey, but those concerns have eased since last year. While respondents largely agree that the rate cuts so far are not enough to alter deal economics fundamentally, the monetary policy movements have still injected optimism into the market. In addition, more than 80% believe that commercial mortgage rates will decrease in 2025, with 75% believing those rates will continue to decrease over the next five years. As an industry that relies heavily on leverage to get deals done, signs of lower-costing debt bode well for the future and will support more robust deal volume. That said, the Fed’s future decisions on rate cuts will depend on how inflation and the overall economic outlook evolve. 2. Acquisitions, Refinancing and Development Markets Improving The acquisitions, refinancing and development markets are slowly starting to heal, the Emerging Trends report noted, pointing to steady improvement in liquidity and more bids in the market, as well as tighter prices and debt spreads. Industry participants are also optimistic about debt conditions ahead, with lending expected to grow by 24% in 2025, indicating a full recovery to pre-pandemic levels and further signaling that normalization and stability are on the horizon. Another key factor market participants are looking at is the stabilization of recent real estate price declines. Cap rates began rising when prices peaked in mid-2022 and continued increasing until plateauing in early 2024. The most recent figures suggest prices might be turning positive again, although this may simply reflect that higher-quality real estate is accounting for a larger share of transactions. 3. Occupied Space Now Exceeds Pre-Pandemic Levels in Most Sectors The pandemic created significant changes in how tenants use space, and where. There are fewer office workers commuting to the workplace, more consumers shopping online and more goods being stored in warehouses. However, despite these changes, overall demand for space has more than recovered from the pandemic and remains robust across most property types, with the exception of office. When looking at the future of the retail market, survey respondents indicated that location is key. While newness is a significant priority for some property types like office, retail spaces tend to derive much of their value and demand based on their location. Frequently, older retail centers command the best locations, preventing newer entrants from gaining a foothold and making them more attractive to investors. In the industrial sector, net absorption has been positive, meaning more space is occupied than ever before. Yet demand has not kept pace with new supply, leading to an increase in vacant space. This has given more negotiating power to tenants, who are increasingly seeking spaces with more modern features such as high energy efficiency, LED lighting and higher clear heights. However, this “flight to quality” trend should abate slightly as the pipeline for new product slows and the supply/demand dynamics balance out. 4. There Is Less Movement Due to the High Costs of Relocation The pandemic not only created a shift in the demand for commercial property, but also shifted where people want to live and work. After years of increasing interstate migration, many areas are experiencing slower population growth or even outright population losses due to soaring home prices, fewer renters having the ability to transition to home ownership, and fewer households relocating for new jobs. The report notes that climate change is also becoming a greater factor in location decisions. The report points to a Freddie Mac analysis that shows natural disaster concerns have prompted one in seven households to consider other places to live. Many commercial properties are also at risk of damage from natural disasters and commercial property owners are facing increasing insurance premiums as a result. Conclusion As the real estate market transitions into a new cycle in 2025, we remain cautiously optimistic for the future. With change comes opportunity, and we’re excited to see how the landscape evolves as we enter a phase of recovery and renewal. With more than 50 years of experience operating in all market cycles, we’re well positioned to continue helping companies unlock otherwise illiquid capital from their real estate assets. If you're interested in learning more, contact us today.
What the Latest Rate Cuts Mean for the Net Lease Sector
The persistent high cost of capital, along with the fact that large amounts of corporate debt are set to mature, have been ongoing challenges for investors. The Fed’s recent rate cut – the first in over four years – leaves many speculating how investors will fare. “Impacts from these changes will take some time to see,” says Zachary Pasanen, managing director, investments, at W. P. Carey. “I don’t necessarily believe we’ll experience a rush of investment overnight. Everyone is still in the process of figuring out what the environment will look like, and there are also geopolitical situations at play.” Cap Rates and Market Sentiment Pasanen suggests a positive outlook for the net lease sector, noting that while volumes are down compared to the previous year, the sector’s resilience remains. He explains that net lease investments function similarly to bond instruments, and with rates being cut, he doesn’t believe the risk profile changes that dramatically. “I think the risk paradigm is still very much in that 7%-8% cap range,” says Pasanen, noting that while conditions may eventually spur more net lease activity, it won’t take place immediately. He also cautions that investors should not get too caught up in “rate cut mania” and risk comprising spread. Focusing on fundamentals and maintaining a disciplined investment approach remain as important as ever. Relaxed Interest Rates and the Financing Landscape Funding business growth and quickly accessing capital have left many corporates looking for alternatives to traditional financing. With the Fed’s recent rate cut, Pasanen believes that sale-leasebacks will continue to be an attractive option. He further notes that while there have been pockets of “stress” in the market, these aren’t the same as “distress.” “Many lenders were willing to accommodate borrowers and work with them,” says Pasanen. “This group made it through this past year and is saying, ‘Okay, I’ve extended the maturity of my debt and identified some dislocation among acquisition targets, and now might be a good time to raise capital and grow my business.’” However, as these businesses return to banks to raise more capital, financial institutions may have reached a limit in how much they can help, a scenario where sale-leasebacks can be beneficial. “W. P. Carey has been in business for over 50 years,” says Pasanen. “We’ve been through numerous market cycles and have a lot of capital to deploy. As the market recalibrates, we’ll continue to do what we do best – work with corporate owners to unlock the value of their real estate through sale-leasebacks.”