Why Sale-Leasebacks Are Surging in 2025

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Featured Article

For many business owners, one thing has become abundantly clear in today’s environment: your real estate may be worth more to you as cash than as an owned asset.

That’s why sale-leasebacks—long a staple of corporate finance—are experiencing a major resurgence in 2025. With higher borrowing costs, tighter lending standards, and rapid expansion goals across retail, automotive, c-store, and industrial sectors, companies are looking for ways to unlock capital without taking on new debt.

A sale-leaseback often becomes the smartest move in the playbook.

🏦 What’s Driving the Current Sale-Leaseback Wave?

Over the past 12–18 months, we’ve seen a consistent pattern across operators:

1. Banks are requiring more equity.

Higher interest rates have made traditional financing more expensive. Many lenders now require 25–35% equity in commercial deals.

A sale-leaseback converts a fixed asset into liquid capital—often 100%+ monetization compared to what a lender would finance.

2. Expansion is happening fast across multiple industries.

Operators in the c-store, QSR, automotive, and distribution sectors are adding units quickly. Real estate ownership slows expansion; liquidity speeds it up.

3. Investors are actively chasing stable, long-term STNL deals.

Demand for long-term, NNN-leased properties with strong operators hasn’t slowed. Investors want predictable income.

This demand supports strong pricing—meaning owners can often sell at premium valuations while staying in place as the tenant.

💡 How a Sale-Leaseback Actually Creates Value

For many operators, the instinct is to hold onto real estate forever. But in today’s market, a sale-leaseback can be more strategic:

1. Grow the business using your own capital.

Operators free up cash for:

• New store openings

• Fleet expansion

• Technology upgrades

• Workforce investment

• Debt reduction

2. Reduce balance-sheet pressure.

A sale-leaseback converts a non-income-producing asset into cash while turning occupancy costs into a predictable lease payment.

3. Lock in control of the property.

With a long-term lease (10–20 years), the operator maintains operational control with no disruption.

4. Improve overall return on capital.

Real estate might appreciate 3–6% per year.
Your business might generate 15–30%+ returns.

A sale-leaseback re-allocates capital toward the higher-yield engine.

📊 What Investors Are Looking For Right Now

If you’re considering a sale-leaseback, this is what the market rewards:

• Strong operating history and financials

• Essential-service businesses (fuel, auto, QSR, medical, logistics)

• Corporate or multi-unit guarantees

• Long terms (15–20 years preferred)

• Rental escalations tied to inflation or fixed growth

If your real estate fits this box, today’s market may assign a cap rate significantly lower than your cost of capital—which is exactly why these deals work.

🧭 Is a Sale-Leaseback Right for You?

Here are the questions I encourage owners to ask:

• Is your real estate tying up capital that could grow your business?

• Are lenders restricting how quickly you can expand?

• Do you want to pay off high-interest debt?

• Do you expect better returns reinvesting in operations?

• Would improved liquidity strengthen your balance sheet?

If the answer is yes to any of these, a sale-leaseback is worth evaluating.

🔍 The Bottom Line

In a market where capital efficiency matters more than ever, sale-leasebacks give operators a powerful tool to unlock equity, accelerate growth, and strengthen long-term financial position.

Investors benefit from stable, long-term NNN cash flow.
Operators benefit from liquidity and expansion capital.

It’s a win-win model that’s only gaining momentum in 2025.

If you want to review the real estate you currently own—or explore whether a sale-leaseback could support your growth plans—reply to this email. I’m happy to run the numbers and map out your options.

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