Let's cut to the chase. If you're a business owner trying to get financing right now, you know how brutal it's gotten out there. Banks are tighter than a new pair of boots, and even solid companies with good credit are getting turned down for loans they would have sailed through just two years ago.
But here's something most business owners don't know: You might be sitting on a goldmine of untapped capital right under your feet. I'm talking about your commercial real estate.
Net lease investment volume surged 57% in Q4 2024, reaching $13.7 billion. Meanwhile, global M&A activity hit $1.89 trillion in the first half of 2025. Translation? Smart money is moving, and sale-leasebacks are leading the charge.
What Exactly Is a Sale-Leaseback? (And Why Should You Care?)
Think of it this way: You sell your building to an investor for cash, then immediately lease it back from them. You get a big check, they get a solid investment, and you keep running your business in the same location. It's like refinancing, but instead of taking on more debt, you're converting your real estate into working capital.
Here's the three-step process:
Sale: You sell your property to an investor (could be a REIT, private equity firm, or institutional buyer)
Lease: You sign a long-term lease (typically 10-25 years) to stay in the building
Operate: You keep running your business as usual, just now you're a tenant instead of an owner
Three Ways Smart Business Owners Are Using Sale-Leaseback Capital
1. Growth Funding
Instead of waiting for bank approval that may never come, companies are using sale-leaseback proceeds to expand operations, buy equipment, or enter new markets. One 3D printing company I know of unlocked $4 million this way to fund their post-COVID expansion.
2. Debt Reduction
Private equity firms are especially savvy about this. One Midwestern manufacturer with 15 properties generated $21.5 million through sale-leasebacks – nearly three times their book value – and used it to pay down expensive debt and improve their financial ratios.
3. Acquisition Financing
With traditional acquisition financing scarce, sale-leasebacks provide the capital needed for deals. You can either do the sale-leaseback before the acquisition to raise funds, or after the deal to optimize your balance sheet.
The Upside (And It's Significant)
Immediate Capital: Get 70-90% of your property value in cash, often within 60-90 days
Tax Benefits: Lease payments are fully deductible business expenses
No Debt on Books: This isn't a loan – it's converting an asset to cash
Predictable Costs: Fixed lease payments for budgeting certainty
Stay Put: Keep operating in your current location without disruption
Market Rates: Current cap rates of 7-8% can be attractive for sellers
The Downside (Let's Be Honest)
No More Appreciation: You miss out on future property value increases
Long-Term Commitment: You're locked into lease payments for 10-25 years
Less Control: You can't modify the property without landlord approval
Capital Gains Tax: The sale triggers taxes that reduce your net proceeds
Market Timing: If you sell at the wrong time, you might leave money on the table
Is This Right For You?
Sale-leasebacks work best if you:
Need capital now and traditional financing isn't available or too expensive
Plan to operate from your current location for at least 10-15 years
Have a strong business with good credit and cash flow
Own industrial, retail, healthcare, or restaurant properties (these are hot right now)
Want to reduce the capital tied up in real estate
Think twice if:
Your space needs are unpredictable
Your business credit isn't strong
You're in a rapidly appreciating real estate market
You might need to relocate or downsize soon
The Market Reality: Why Now Is Different
I've been in this business long enough to know when market conditions create real opportunities. Right now, we've got a perfect storm:
Credit markets are the tightest they've been in years
Interest rates make traditional debt expensive
Institutional investors have billions to deploy in net lease properties
Industrial properties (which many of you own) are especially hot
The buyers are there, they have money, and they're actively looking for quality properties with good tenants. That's you.
Industries That Are Crushing It With Sale-Leasebacks
Manufacturing: Factories and industrial facilities are gold right now. If you've got specialized equipment or processes, investors love the long-term stability.
Healthcare: Medical facilities, especially specialized practices, are seeing strong interest from healthcare REITs.
Retail & Restaurants: Chains are using sale-leasebacks to fund expansion while maintaining their prime locations.
Auto Services: Dealerships, service centers, and specialty automotive businesses are perfect candidates.
Ready to Explore Your Options?
Look, I'm not saying a sale-leaseback is right for every business. But if you're sitting on valuable real estate and need capital to grow, reduce debt, or make acquisitions, it's worth a serious conversation.
I've helped dozens of business owners navigate these transactions. I know which buyers are active, what they're paying, and how to structure deals that work for you long-term.
Here's what I'll do: Give me a call, and I'll provide a confidential assessment of your property's sale-leaseback potential. No cost, no obligation – just straight answers about whether this makes sense for your situation.
Brett Vogeler
Commercial Real Estate Broker
📧 Email: [email protected]
📞 Direct: 863-255-1613
🌐 https://my360perspective.com/
Don't let tight credit markets hold back your growth. Let's unlock the capital that's already sitting in your real estate portfolio.
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23 exits. Net annualized returns like 17.6%, 17.8%, and 21.5%. $1.2 billion invested.
Shares in new offerings can sell quickly but…
*Past performance is not indicative of future returns. Important Reg A disclosures: masterworks.com/cd.
Book Shelf from Brett Vogeler: amazon.com/author/bvogeler
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