Many companies have a large part of their equity tied up in their real estate assets, despite not being in the business of real estate. In a sale-leaseback, a company sells its real estate to an investor like W. P. Carey for cash and simultaneously enters into a long-term lease. In doing so, the company extracts 100% of the property’s value and converts an otherwise illiquid asset into working capital to grow its business, while maintaining full operational control.
Sale-leasebacks enable the seller/tenant to:
Sale-leasebacks can benefit the seller and prospective tenant in several ways. See below for sale-leaseback examples.
Sale-leaseback proceeds funded a portion of the capital stack for a larger complex corporate M&A transaction, facilitating the simultaneous closing requirements of the parties involved.
|Sale-Leaseback Investment||€153 million|
|Property Details||Portfolio of 36 DIY retail facilities|
|Location||Amsterdam, Rotterdam and The Hague (Netherlands)|
|Square Footage||1.5 million|
Sale-leaseback proceeds funded tenant’s future growth needs through the acquisition of two critical distribution facilities and by providing additional funding for a follow-on expansion of one of the facilities.
|Sale-Leaseback Investment||$93 million (includes expansion funding)|
|Property Details||Two distribution facilities|
|Location||Inwood, WV and Kilgore, TX|
|Square Footage||1.6 million|
Sale-leaseback proceeds provided exit capital for a local developer and its real estate private equity partner.
|Sale-Leaseback Investment||$56 million|
|Property Details||One LEED-certified, Class-A office HQ and R&D facility|
W. P. Carey Inc. (NYSE: WPC), one of today’s largest diversified net lease REITs, provides long-term sale-leaseback and build-to-suit capital solutions primarily for companies in the U.S. and Northern and Western Europe. We are well positioned with the capital and experience needed to maximize efficiency and ensure certainty of close on complex, single and multi-country deals that meet our investment criteria.
Portfolio data is as of September 30, 2019.