You’ve spent years building equity in the four walls that house your business. The place feels like a second home—your signage out front, your coffee mug in the breakroom, your data cabling tucked behind drywall. But what if the equity trapped in that brick-and-mortar could be working just as hard for you as your team does? A sale-leaseback lets you unlock capital today while continuing to run operations exactly where they are tomorrow.
Below we break down how the strategy works, why private investors are eager to fund it, and the practical steps to get started—no cardboard boxes required.
A sale-leaseback is exactly what it sounds like: you sell the real estate you occupy and simultaneously lease it back from the buyer. Title transfers to the investor, but you stay put as the tenant, writing rent checks instead of making mortgage payments. The rent is typically structured as a long-term triple-net (NNN) lease—meaning you, the tenant, remain responsible for maintenance, taxes, and insurance—while the new owner enjoys a predictable income stream.
From a finance perspective, a sale-leaseback converts an illiquid asset (your building) into immediate cash without impacting day-to-day operations. Think of it as refinancing on steroids: instead of a loan with covenants and amortization schedules, you get a lump sum of equity and an occupancy agreement that spells out rent, term length, and renewal options.
Selling the building outright and relocating is one path, but it often disrupts staff, interrupts customer habits, and burns time hunting for new space. A leaseback, on the other hand, keeps the front door revolving as usual while handing you a sizable check. Typical motivations include:
Because you avoid a physical move, you sidestep downtime, construction headaches, and the risk of losing employees who don’t want a longer commute. For many owner-operators, that continuity is priceless.
Private investment platforms, family offices, and real-estate-focused funds view sale-leasebacks as a reliable, bond-like alternative to traditional fixed-income products. Instead of clipping coupons from corporate bonds, they collect rent backed by an operating business they’ve underwritten.
Long-term, triple-net leases often span 10 to 25 years with pre-negotiated rent bumps. That means the investor locks in predictable, escalating cash flow that outpaces many bond yields.
Because rent escalations are baked into the lease—either tied to CPI or fixed percentage increases—the income stream tends to rise with, or even outpace, inflation. That protects purchasing power more effectively than a static coupon payment.
A single-tenant industrial facility in Phoenix behaves differently from a multi-tenant office high-rise in Manhattan. Sale-leasebacks allow private investors to diversify across industries (manufacturing, healthcare, e-commerce logistics) and geographies—spreading risk while still enjoying simplicity of management under the NNN structure.
The heart of any sale-leaseback is the lease itself. Structure it thoughtfully and both parties sleep well at night. Key points to hammer out include:
Title changes hands, yes, but operational control remains via your lease. You decide who walks through the door each morning, set warehouse hours, and paint the walls whatever color you choose—as long as you meet lease obligations.
Sometimes true, sometimes not. Remember, a mortgage includes principal, interest, taxes, and insurance. A market-rate rent may look higher in isolation, but you’re eliminating balloon payments, future refinancing risk, and capital tied up in down payments.
Mid-market industrial, medical, and specialized manufacturing facilities are hot targets because they offer higher yields and less competition than prime urban office towers. If your building is mission-critical to your operations, chances are it’s attractive to private capital.
Conduct thorough environmental and structural inspections before initiating marketing. Surprises late in due diligence can kill momentum faster than a broken elevator in a high-rise.
A well-executed sale-leaseback can close in 60 to 120 days, meaning you could convert idle equity into actionable cash before your next quarterly board meeting.
A sale-leaseback isn’t a magic wand, but for many owner-occupied businesses it’s the rare financing tool that delivers liquidity without upheaval. By partnering with private investors hungry for long-duration, inflation-protected income, you transform real estate from a static asset into a dynamic source of growth capital—while your employees keep parking in the same spots and your customers keep walking through the same front door.
Evaluate the numbers, negotiate smart terms, and you might discover that the most profitable move you’ll make this year doesn’t involve moving at all.
