SALE AND LEASEBACK

WHEN CAPITAL IS NEEDED FOR GROWTH

A sale & leaseback Sale & Leaseback can be used to free up cash to grow a business through acquisition or to acquire growth capital, additional facilities, technology, and equipment. With the tightening of the credit markets, many businesses do not have access to as much credit as they need to achieve their growth objectives; many are too close to their borrowing limit to consider expansion or make an acquisition of a competitor.

Sale & Lleaseback can be used as an off-balance-sheet financing structure that allows the seller to turn a non-earning asset into growth capital. The company can then save the available bank financing for acquisitions and growth opportunities in the future.

The sale & leaseback Sale & Leaseback proceeds could be used for other corporate purchases like the buyout of a shareholder or a special cash distribution. The absence of covenants in sale & leaseback Sale & Leaseback arrangements provides business owners with significant discretion in determining the best use of their company’s company's cash.

InsimpleIn simple terms, with Property yeiledsyields as low as 5-6% of capital, most business’es (if operating efficiently) and profitably), should be able to deploy that capital to return significantly higher returns than 5-6%, and more like 20-80%, depending on the nature and success of the bsuninessbusiness.

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WHEN CORPORATE RESTRUCTURING IS NEEDED

Businesses that require additional liquidity to pay creditors or are considering bankruptcy downsizing can look to a sale & leaseback Sale & Leaseback for capital. Depending on the value of the company’s company's real estate, a sale & leaseback Sale & Leaseback can supply a considerable amount of liquidity and be a quick initial step to begin a reorganiszation process. Sale & leaseback investors can work to meet tight time frames. If a potential seller can provide historical financial statements, a business plan, projections, and a description of the planned use of proceeds, sale & leaseback investors can make rapid investment decisions – often within 45 days.

WHEN EXIT FINANCING IS NEEDED

The sale & leaseback Sale & Leaseback can be used for other corporate purchases like the buyout of a shareholder or a special cash distribution in the case of an exit strategy. The absence of covenants in Sale & leaseback Sale & Leaseback arrangements provides business owners with significant discretion in determining the best use of their company’s company's cash.

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THE PROCESS

The process of running a successful sale & leaseback Sale & Leaseback project may seem daunting. Every engagement is different, but we like to follow this process for completing a sale & leasebackSale & Leaseback.

Stage 1: Understand Your Objectives

It is important to work closely with every individual client and understand their needs and outcome expectations. Once considered, a strategic plan, budget, and approach that are aligned with our client's core business objectives are defined.

Items considered during Stage 1 include:;

• Your objectives and key drivers

• Optimum Optimal expectations of the sales leaseback outcome

• Price Expectationsexpectations

• Assessment of a realistic rental payment which that compleiments the business

• Tax considerations such as Capital Gains Tax

• Preferred sale and settlement timing

Stage 2: Professional Pricing Assessment

An objective commercial real estate pricing assessment, based on current market conditions and historical data, is prepared for you. Our professional rental analysis is supported by hard evidence and comparable agreements in the current market.

Market Rental Assessment is imperative to a successful sale & leasebackSale & Leaseback. If the rent is topped up, then the yield will also increase, and you could end up with a lower value (of property sale) and higher long termlong-term rental costs over the term of the lease.   

Communication of market trends and identifying similar commercial properties will help provide an accurate and well-considered price expectation range to expect for the sales Sale & Lleaseback.

Stage 3: Prepare a Commercial Property Lease

We will provide standard, detailed lease agreements prepared by expert property lawyers. Key considerations of these commercial leases are:;

• Term of the lease, typically being 12-15 years.

• Option periods for extension beyond the initial term, typically 5 years + 5   years + 5 years.

• Rental amount to pay.

• Rent review structure, including when and how market rent reviews are allowed.

• Type of lease, typically a double or triple net.

• Potential for expansion and how this structure may work.

Stage 4: Due Diligence Package

If you wish to market your property publicly for sale under the sale & leaseback Sale & Leaseback structure, then a commercial real estate due diligence package is custom created for every one of our clients. This package contains:;

• a professional asset presentation

• a list of recommendations

• contractual due diligence

Recommendations for the appointment of external specialists that may be needed includes:

• Environmental

• Geo-tech

• Flora & Fauna

• Cultural Heritage

• Planning

If you can sell ‘'off-market’ market' to a qualified buyer, most of these costs would be met by the buyer via a Due Diligence clause in the sale agreement.

Stage 5: Commercial Real Estate Agent Tender

Whether you go to the public market or sell off-market, the appointment of a commercial real estate agent is an important step in the sale & leaseback Sale & Leaseback process. The appointment of the most suitable commercial agent based on your needs will be streamlined by our commercial experts.

Often with sale & leaseback Sale & Leaseback arrangements, the off-market strategy to sell is a better option. It will mean all processes will be completed behind closed doors and will not alert your staff, who may develop concerns about the future of the business and their livelihoods. Although a sale & leaseback Sale & Leaseback is likely to initiate no change into the day- to- day running of your business or your staff's experience, a confidential campaign can often resolve such issues that may arise with staff.

Stage 6: Close That Deal!

Sale & Lleaseback investors can work to meet tight time frames. If a potential seller can provide historical financial statements, a business plan, projections, and a description of the planned use of proceeds, sale & leaseback Sale & Leaseback investors can make rapid investment decisions – often within 45 days.

The final negotiation of your sale & leaseback Sale & Leaseback can be an exciting but also stressful time. As with residential real estate negotiations, the commercial market can be a tricky one to navigate when it reaches the 'pointy end' of the deal.

We minimise the stress of this negotiation time from you by reviewing and assessing final bids, checking buyer capacity, capability, and their historical actions.

We ensure that the final agreement process will maintain alignment with your objectives and preferred outcomes; , both in price and terms. This negotiation strategy is part of our service, and we involve you as well as the buyers as we will always seek the best outcome for you.

Once a final offer that meets your needs is agreed upon, we execute the contract and take receipt of the deposit to secure the agreement. We maintain clear communication with you throughout this process.

Monitoring any further contractual conditions and requirements, we manage the negotiation for you until the sale & leaseback Sale & Leaseback deal is completely finalizsed.

Stage 7: Settlement

After the deal is completed, the contracts are signed, and the champagne put on ice, we continue monitoring all aspects of your sales & leasebackSale & Leaseback.

We will review and reconcile marketing costs, agency fees, and any reimbursements owed to you.
We check all documentation, transfers, and payments are attended to on scheduled due dates.
We ensure all aspects of the contract are met.
And finally, we will attend the settlement and provide you with confirmation of the contract closure.

The settlement process typically takes 30-60 days from when the contract is marked as unconditional.