By the Numbers
If you own the building your business operates from, a large amount of your company’s capital is sitting in the walls—earning nothing. A sale-leaseback lets you take that equity out and put it back to work, without relocating a single forklift. Here’s how it works and when it’s the right call.
What a sale-leaseback actually is
You sell your industrial building to an investor and, at the same closing, sign a long-term lease to stay as the tenant. You walk away with the full market value of the real estate in cash. Your operations don’t move, your address doesn’t change, and your team doesn’t notice anything except that the rent check now goes to a new owner.
Why owner-users do it
Free up trapped equity. Most owners can earn a higher return reinvesting in their own company—equipment, hiring, acquisition, paying down higher-cost debt—than the building appreciates on its own.
100% of value, not 65–75%. A sale-leaseback typically unlocks the full market value. A refinance only gets you a loan-to-value slice of it, plus a new monthly payment.
Set your own lease terms. Because you’re the seller and the tenant, you negotiate the term, the rent, and the renewal options up front—usually a 10–15 year lease with options that keep you in control of your location for decades.
What your building is worth to a leaseback buyer
Investors price a sale-leaseback off the lease you sign. A long lease to a healthy operating company at a fair market rent is exactly the stable, single-tenant income that net-lease buyers want. The stronger your business credit and the longer the term, the lower the cap rate—and the more cash you take home.
That’s the lever most owners miss: the rent you agree to pay sets the sale price. A slightly higher rent supports a higher value (and more proceeds); a lower rent means a lower payment but less cash up front. A good broker models both so you can pick the trade-off that fits your plan.
The trade-offs, straight
You’re giving up future appreciation and the control of ownership, and committing to a long lease that becomes a real expense on your P&L. If you might outgrow the building in three years, a long leaseback may not fit. The sale can also trigger taxable gain—worth running past your CPA.
When it makes sense
A sale-leaseback tends to fit when you want growth capital but need to stay put, when your building has appreciated well past what you owe, or when you’re planning succession and want to separate the operating business from the real estate cleanly.
Want to See What a Leaseback Would Net You?
I’ll value your building two ways—as an empty sale and as a leaseback at a few rent levels—so you can see the numbers side by side before deciding anything.
Request a Sale-Leaseback Analysis