Sale-and-leaseback
A sale-and-leaseback is a transaction whereby a company sells an asset, such as real property, to an investor and immediately leases it back in order to obtain liquidity.
In a sale-and-leaseback transaction, the owner sells an asset to a third party and subsequently leases it back pursuant to a lease agreement. This enables the seller to apply the sale proceeds to other business purposes while retaining use of the asset.
The structure is relevant in real estate and corporate finance, as it permits companies to strengthen their balance sheet and release capital without operational disruption. In practice, sale-and-leaseback arrangements are frequently employed by enterprises holding capital-intensive assets to fund growth or reduce debt.
“The company entered into a sale-and-leaseback of the office to generate additional liquidity for its expansion.”
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