If you own the commercial property in which your business operates, you’re probably familiar with the various opportunities available should you need more liquid capital to maintain current operations, grow, and scale your organization. Simply defined, a sale leaseback offers property owners the opportunity to sell their physical property and simultaneously lease it back from a new commercial real estate investor under a long-term lease without disrupting the business. This is a mutually beneficial transaction for both the business owner and the investor. The business owner gains an immediate working capital infusion into the business from the commercial real estate sale while the investor receives the long-term rental income from the seller-now-tenant. The transaction may sound technically complicated, so if you’re considering this kind of transaction, it’s worth finding an experienced sale leaseback broker to help you navigate the process.
Finding A Qualified Sale Leaseback Broker
The ins and outs of a sale leaseback transaction require diligent attention to detail. There are critical lease details and lease structures (e.g., Absolute NNN; NNN; NN; Modified Gross; Full Service, etc.) that can impact the commercial property valuation when completing a sale leaseback. A sale leaseback broker can provide consultative guidance to ensure those lease details and the most appropriate lease structure are well-received in the eyes of the investment market for a smooth and seamless transaction.
These kinds of brokers can offer tremendous benefits to your sale leaseback transaction. So, how do you find someone who has the understanding and qualifications to provide the support needed for a sale leaseback transaction? We’ve put together a few key characteristics to look for when hiring a commercial real estate expert for your upcoming transaction.
Their Track Record
The first thing that you want to look for when hiring a leaseback broker for your sale is the historic transactions that they’ve executed. Experience is incredibly important in the commercial real estate industry, and it can make a monumental difference in your sale leaseback transaction.
Does the broker have significant experience with, for example, office or industrial lease transactions? Does that same broker also have significant experience with commercial property sales as well as financial analysis? Speak candidly with your broker options about the experience that they have and how they’ve been successful. More importantly, don’t be afraid to ask about transactions that had some bumps in the road and how they handled those challenges.
In an ideal situation, your broker should be able to explain the advantages and disadvantages of a sale leaseback to you as well, to make sure you’re making the right decision. The personal experience of a broker is one of the most valuable assets that they can bring to your sale leaseback transaction. Make sure you take a dive deep into what specifically a broker you’re considering hiring can offer.
Areas Of Expertise
In addition to a history of success, you’ll also want to get familiar with the expertise any given sale leaseback broker may have. It’s not only the type of transactions they’ve executed the most, but also the types of businesses and properties that they work with most often. Each class of commercial property comes with its own attributes, restrictions, and regulations. It’s important that the broker you’re hiring is familiar with the specifics of the type of property you’re selling and any nuances that may go along with that sale.
Resources & Responsiveness
A decade ago, there were often pros and cons to different sized commercial real estate brokerages. As the years have progressed, technology has leveled the playing field by providing equal access to CRE resources and exposure. It’s now more important to determine if the broker that you’re considering for your sale leaseback will dedicate the time, energy and resources necessary throughout your transaction. They shouldn’t just “act” engaged to win your business in the beginning, they need to put in the effort throughout the entire process. Whether you’re looking for strategic marketing to identify and target the right investor or responsive expert consultative guidance to guide you through the process, be sure that the professional you’re considering hiring can provide everything that your business will need.
Your Trusted Sale Leaseback Broker
Your relationship with your commercial real estate broker is of the utmost importance. A commercial real estate transaction is among the highest dollar volume you’ll likely ever experience, so establishing trust with the broker you choose to work with is absolutely essential. When you’re looking for a sale leaseback broker with the expertise and resources you can count on, consider Fountainhead Commercial. Our team is well-versed in the specifics of a sale leaseback transaction and we can effectively support you through each and every step. We’ll leverage our decades of commercial real estate experience to make the most out of your sale leaseback transaction.
If you’re considering a sale leaseback as an option to access capital for the acquisition of a competitor, purchase of critical equipment, or to fund business growth, contact our Certified Commercial Investment Member (CCIM) designated broker today to schedule a consultation.