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Sale-Leasebacks Big This Year?

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According to the Slatin Report, even while investment sales slow in general, sale-leasebacks may see a rise.

In fact, sale-leasebacks may end up being a star among transaction types this year, at least as much as this year's tepid property markets will allow it. “The whole investment pie is going to be smaller this year, without a doubt,” says Kenneth Ruby, managing director of Jones Lang LaSalle's Capital Markets Group. “But I also think that sale-leaseback as a percentage of all investment transactions is going to go up.”

Some players in the market are positively optimistic about their prospects for the rest of this year and beyond, which at the moment is as rare as a cat with wings. “I'd say we're going to do more deals this year than last,” says Paul M. Domb, vice president of asset acquisition of Miami-based United Trust Fund Inc., which does little else besides sale-leasebacks. “At recent industry events, such as MBA [in February in Florida], I heard a fair amount of pessimism about sale-leasebacks, but I don't see it on the ground.”

Sale-leasebacks already command a respectable, if not enormous, slice of all investment transactions. In its January/February Global Capital Trends, Real Capital Analytics pegged total sale-leasebacks worldwide at about $56 billion, out of corporate property sales of $88 billion globally and total real estate investment sales of $1.04 trillion. Sale-leasebacks thus represent a shade over 5 percent of all investment sales, according to RCA's data.

(Spotted at Deal Junkie.)

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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