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Many companies own the real estate from which they operate their business. However, if investing in real estate is not the company’s core business, might it not be better to free up that capital? Capital invested in the company’s primary business may generate a higher return on investment.

In challenging economic times, many companies need greater liquidity. On the other hand, we see that typical debt providers like banks are reluctant to provide additional financing, especially in a bear market. Current high interest rates also may prevent companies from obtaining debt financing. In such cases, a sale and leaseback transaction may be beneficial for both investors and companies.

In sale and leaseback transactions, companies sell their real estate to an investor and enter into a long-term lease with the new owner. Often, parties agree on a ‘triple net lease,’ meaning that the lessee remains responsible for all maintenance, repair, and insurance costs. The company as lessee enjoys many of the same benefits (and burdens) of owning real estate, with the added ability to invest liquid capital into the growth and innovation of its business.

For an investor, a sale and leaseback transaction can provide a reliable and steady flow of rental income, which is adjusted for inflation. Additionally, an investor can review the historical performance of the company and assess its future potential, thus maximizing the investor’s own profits.

In the current market, we still see an appetite for sale and leaseback transactions, especially with investment-grade companies and long-term lease agreements (10-15 years). The Greenberg Traurig RE-STRUC team has deep experience assisting clients and investors with sale and leaseback transactions.

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Photo of Simone Wijngaard Simone Wijngaard

Simone Wijngaard is a senior member of the Real Estate Practice. She divides her time between London and Amsterdam. She focuses on advising international investors and financers on investment holding structures, real estate investments, as well as hotel investments and operations.

Photo of Alexander van Hövell Alexander van Hövell

Alexander van Hövell focuses his practice on real estate and corporate law, with emphasis on commercial real estate transactions and property development. Alexander has particular experience in the field of corporate real estate and he advises several national and multinational companies on their…

Alexander van Hövell focuses his practice on real estate and corporate law, with emphasis on commercial real estate transactions and property development. Alexander has particular experience in the field of corporate real estate and he advises several national and multinational companies on their housing issues, including sale and leaseback transactions, disposals and acquisitions as well as the redevelopment of existing properties. Alexander also advises on renewable energy projects, restructurings, and all notarial aspects of real estate and finance transactions. Before joining Greenberg Traurig in 2021, Alexander worked at a Global Elite law firm for almost 12 years.

Alexander is ranked by Chambers in the category “Real Estate – Leading Notaries in Netherlands” as an Associate to Watch and he is described as a “very diligent lawyer who really knows what he’s talking about.”

Alexander is a member of the RE-STRUC team. A multidisciplinary team within Greenberg Traurig comprising focus areas including real estate, restructuring, including WHOA (“Dutch Restructuring Scheme”), financing, conflict management, alternative dispute resolution, RICS accredited mediation services, regulatory and tax. Please visit our dedicated RE-STRUC page for more information.