By now, the sale-leaseback industry has restructured the ownership of trillions of dollars worth of the nation's corporate real estate assets, and the trend seems to be continuing.

"As a rule of thumb, 40% of the nation's corporations do sale-leasebacks," says Paul Domb, vice president of asset management at UTF. "The market (for sale-leasebacks) is growing because companies are becoming more aware of this option," says Domb.

"Most of the corporate finance people that we're dealing with have looked at their various financing options and they've already come to the conclusion that the sale-leaseback is the option that they want to pursue at that particular time,." says Fred Berliner, senior vice president and director of acquisitions at United Trust Fund (UTF), Miami.

Typically, a sale-leaseback runs for a 20-year term, with another 20- to 30- year option tacked onto the back end of the lease.

"The sale-leaseback allows a company to lock in a long-term rent (cost of funds) for a fixed rate on an asset (a building) that they are going to be using in their business for a long time," says Berliner.

Generally more companies consider sale-leasebacks when the spread between long interest rates and short rates is narrower. "It doesn't make sense to borrow short when the asset is a long-term asset, and real estate is a long-term asset," says Berliner.

Perhaps most importantly, sale-leasebacks also free up cash for companies to make acquisitions, to plow back into their business and for operating capital. "Their return using the money in their own business should be a more profitable venture than keeping it tied up in the real estate, where they get very little return," says Domb.

From an accounting standpoint, companies get "operating lease treatment," which means they don't have to show the sale-leaseback as a debt obligation on their books.

Also, all rent is deductible on a lease, so there is a tax advantage to the vehicle as well.

UTF started in the sale-leaseback business back in 1972. in 1988 it formed a limited partnership with Metropolitan Life Insurance Co. which put it over the top. "We've increased our business threefold since then," says Domb.

Met Life brings its name and financing to every transaction and UTF brings its expertise in structuring the deals. But it doesn't manage the properties. "The companies maintain the properties as if they own them," says Domb. And there is a built-in incentive for them to keep the property values high since their names and corporate identities are often hanging on the shingle outside.

"Companies see real estate as a way to free up their capital, rather than keeping their dollars tied up in it," says Berliner.