- Convert equity into cash
- Strong liquidity
- Improved balance sheet
- Increased working capital
- Pay down debt
- Gains can be amortized
- Robust credit standing
- Fewer restrictive covenants
- More economical than third-party
What is a Sale-Leaseback?
In a sale-leaseback, you agree to sell your property to a commercial real estate investor and lease it back for a set period of time, usually at least ten years. While you occupy the building, you pay rent and operating expenses under the triple net structure. This gives you control over the building. When the lease expires, you have options to renew at pre-negotiated terms, letting you stay longer. Or, if you’re done leasing the property, you can walk away and leave it with the commercial real estate investor.
The Acquisition Sale-Leaseback Process
In traditional lending, banks have a cap on the loan amount, which is tethered to 60 to 75 percent of FMV. Conversely, simultaneous sale-leaseback transactions generate more capital than debt financing. In these arrangements, owners can access 100 percent of the real estate’s value.
In this type of transaction, the owner of a commercial property sells the property, while continuing to retain its use; operations continue without any disruptions. Welcome Group and the seller/tenant constructing a structured lease agreement, allowing the tenant to benefit by utilizing the property, without the financial constraints.
Welcome Group has a proven history of helping corporate clients realize the power of unlocked capital by executing acquisition sale-leasebacks. As real estate developers, we have been fortunate over the past 30 years to structure a diverse portfolio. Going forward, we are narrowing our focus; our primary goal is to negotiate multifaceted acquisition sale-leaseback transactions. Our target is the South and Southwestern regions of the U.S.
Our expertise is providing a suite of services to businesses that are defined as single-tenant. Companies following the trend are tapping into the hidden equity in their own real estate. To extract those resources, we blend our exemplary experience with our extensive knowledge of the real estate market. As each business is unique, we work diligently with the client to create a customized acquisition sale-leaseback strategy which allows them to allocate that capital more efficiently.
In the past 30 years, acquisition sale-leaseback arrangements have been picking up steam, as businesses are seeking creative solutions to redeploy assets. This cash flow infusion often acts as a catalyst to help clients secure capital. With funds in hand, they have the capacity to expand more rapidly and expedite growth.
Welcome Real Estate Services
A subsidiary of Welcome Group LLC, Welcome Real Estate Services provides our tenants with Certified Property Managers (CPM®) from the Institute of Real Estate Management (IREM). Our Tenants are given personal attention and full /direct access to us as landlord instead of working through a third-party management company. Welcome Real Estate Services works in partnership with our tenants by helping maintain the property and plan for our tenant’s goals of their business, whether expanding their existing facility or moving and expanding to a different facility without any disruption.
Our team of property managers focuses on maximizing your experience as a Welcome Group tenant by:
- Helping to Maintain Your Facility – Ensuring the proper upkeep of your facility can be crucial to your production and the success of your business. Our Real Estate Management professionals will help our tenants address the needs that can arise when caring for the building. We can offer resources that address any maintenance needs, including proactive preventative maintenance as well as services such as tax protesting.
- Managing Tenant Relationships – Welcome Group assists our tenants with renovations, expansions or relocation needs. In addition to accommodating our tenant’s facility necessities, we work proactively to assist our tenants by managing lease expirations, renewals and accounting obligations.
We’re here to help!
Welcome Real Estate Services provides excellent due diligence to ensure tenants operate within legal parameters and accommodate any and all questions our lessees may have. We are dedicated to our tenants by providing the care and attention needed to keep their business running smoothly and efficiently.
Our real estate management services include, but are not limited to the following:
- Insurance Index – Welcome Real Estate Services performs annual negotiations of rates, insurance, lease compliant, obtaining tenant certificates, document management, lender compliance, and maintain insurance broker dialogue. We keep insurance rates as low as possible to assure we reduce cost for our tenants.
- Tax Index – Welcome Real Estate Services performs annual protesting/services of taxes and property values (this is a multi-step process over 6 months), hiring tax protesting firms, collection and payment of taxes as well as end of the year reconciliations.
- Rent Invoicing – Welcome Real Estate Services handles the monthly calculations which include sending out invoices, processing rent payments, handling all questions from tenants, working with tenant’s accounting departments and document management.
- Maintenance Repairs – Welcome Real Estate Services works with our tenants by assisting to escalate annually and quarterly maintenance contracts, site visits, managing correspondence between tenants, vendors and the owners, vendor referrals, managing catastrophic issues such as storm and hurricane damage (fixing damage, dealing with insurance claims, coordinating vendors, etc.), resolving lease issues, and application of all lease requirements and obligations for tenant and owners.