Are you, or a business you are familiar with, looking to use and control essential business real estate without having vast sums of debt and equity capital in an illiquid asset? Having been involved in many sale leaseback loan transactions over the years, let MidCap arrange the financing needed to complete a transaction.
To most users of commercial real estate, the control and use of a property is all that is necessary. That said, actually owning the property isn’t always necessary to achieve those goals. With a sale leaseback loan transaction, users can control and use properties without actually owning them. To that end, many property owners choose to execute sale leaseback transactions and enter into lease arrangements on their properties. In a sale leaseback transaction, sellers can convert illiquid assets into cash while still retaining use of the property. Essentially, the user sells the property to an unrelated third party and then enters into a lease for the property at a mutually agreeable term or time period. Another benefit that the seller receives in a sale leaseback loan transaction is tax savings. Leasing the property back essentially turns it from an asset to a contingent liability. The monthly rent is completely tax deductible as a business expense.
MidCap’s responsibility in this situation is to arrange a new loan to facilitate the sale leaseback transaction. The loan would be originated in the name of the new purchaser that would then lease the property back to the seller/operator.