Real Estate Sale Lease Back: BenefitsAdvantages of a Sale Leaseback to the Seller / User- User retains control and utility of the property in a sale leaseback.
- User can effectively "depreciate" (i.e. write-off) the land involved as the lease payments cover the use of the land and building, and are tax deductible.
- If leasing back at the "right" rent with lower After Tax NPV, which can result in making a smart economic decision.
- Removes a capital asset from the balance sheet at book value and replaces it with cash realized from the sale.
- Improves cash position thus freeing up cash for other investments.
- Effects an attractive exit strategy for a user that may not otherwise be able to sell the real estate readily.
- You can view a LseMod sample report or download a full report.
- From a financial perspective, generally because of the increased security for an investor in ownership, the financial tax benefits of depreciation to a new owner and the potential for appreciation in the value of the property, a user's cost of a mortgage borrowing will exceed the rent that an investor/purchaser will require. Further, 100% of the tied-up capital (less capital gains tax-which might be sheltered) can be realized. If the additional capital and reduced costs from a Sale Leaseback can be used to grow a business or sustain it in a downturn it can prove a very attractive financing tool. However, the financial appeal of a Sale Leaseback must be balanced against strategic and operating considerations. - You can view a sample report or download a full report.
Other Topics About Real Estate Sale LeasebackWhat Is a Sale Leaseback? Advantages of a Sale Leaseback to the Seller / User Disadvantages of a Sale Leaseback to the Seller / User Strategic and Operating Considerations for the Seller / User Advantages of a Sale Leaseback to the Investor Disadvantages of a Sale Leaseback for the Investor Key Elements and Assumptions in Analyzing a Sale Leaseback Creating a Sale Leaseback Financial Analysis Sale Leaseback Accounting Bottom Line Caution
© 2007 James R. Duport, All rights
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visit our web site at http://www.LseMod.com for information on our site selection financial
analysis software for commercial real estate. LseMod, the professional’s choice since 1996, is lease
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