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The Investor Demand for Sale-Leaseback Deals

Updated: Mar 20, 2018

Today, net-leased property occupied by a single tenant which is not an investment-grade credit is attracting a national investor audience.


This is primarily because of:

  • The pervasive use of the Internet

  • Attractive investment yields (cap. rates) compared to core real estate and other security investments

Industrial properties valued under $20 million and as low as $1 million are no longer a “local” deal.

Investors view the sale-leaseback as more attractive than a “junk bond” of equivalent yield, because they have real estate collateral supporting their investment.   If a company fails, its bonds are worth $0.  In a sale-leaseback structure, however, if the company fails, its underlying real estate will always have value.

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