Over the past eight years, the Real Estate Group at Thompson Coburn has represented clients in sale/leaseback and net lease transactions valued at nearly $2 billion. The pace of sale/leaseback transactions has accelerated in 2014, as both publicly traded and privately held companies analyze the benefits and drawbacks to a sale/leaseback transaction.
The lease side of the transaction is structured as an operating lease, which may improve the company’s return on equity, return on assets, debt coverage ratios and allow cash from the sale of the real estate to be redeployed for a higher rate of return in the core businesses of the company. A sale/leaseback can be especially advantageous when a company has been unable to fully utilize its real estate depreciation because of tax credits or loss carry forwards.
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