What are the primary benefits realized by a tenant from a NNN sale-leaseback transaction?
A. A sale-leaseback, structured properly with an operating lease, in addition to expense reduction and the conversion of the seller/tenant’s illiquid real estate assets to capital, can provide the seller/tenant company with the following business advantages: 1. 100% financing based on the assessed value of the property 2. Operating leases that do not appear on the tenant’s balance sheet as debt or as a long-term lease obligation 3. Full control of the tenant’s real estate under lease provisions 4. Tax deductible lease payments 5. Cash realized from the sale-leaseback transactions that can be used to enhance liquidity, expand operations, acquire other businesses, reduce debt, invest in 1031 exchanges, etc.
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