How Does a Sales Leaseback Work and When Does It Make Sense for a Tenant?

For many organizations, owning real estate provides long-term stability—but it can also tie up valuable capital. A sales leaseback allows companies to unlock that capital while continuing to operate in the same location. This financial strategy has gained momentum as occupiers look for new ways to strengthen liquidity, fund growth, and maintain operational flexibility—all without taking on new debt.

What is a sales leaseback?

A sales leaseback is a transaction in which a company sells a property it owns to an investor and simultaneously leases it back under a long-term agreement. The seller becomes the tenant, retaining full control over day-to-day operations while the buyer earns steady income through rent payments.

In practical terms, the company converts an illiquid asset into cash while preserving use of the facility. The transaction provides immediate capital, predictable occupancy costs, and the ability to reallocate resources into higher-return initiatives such as expansion, research, or technology investment.

When a Sales Leaseback Makes Strategic Sense

A sales leaseback can be beneficial for tenants when certain financial or operational conditions are in play:

1. Capital Redeployment: Businesses seeking to fund growth, acquisitions, or modernization often use sale proceeds to reinvest in operations that generate higher returns than real estate ownership.
2. Balance-Sheet Optimization: Monetizing owned assets can strengthen liquidity ratios and reduce debt—particularly valuable during periods of tighter credit or rising interest rates.
3. Long-Term Space Commitment: Companies that plan to remain in their current facility for 10 or more years can use a sales leaseback to secure occupancy stability while improving financial flexibility.
4. Attractive Real Estate Market Conditions: In strong investment markets with favorable cap rates, a sales leaseback can yield premium valuations that may not persist indefinitely.

How Keyser Adds Value to the Process

Keyser brings a conflict-free, occupier-only perspective to every sales leaseback analysis—ensuring advice is unbiased and focused solely on what benefits the client. The firm evaluates whether the transaction supports both immediate liquidity needs and long-term business goals, rather than simply facilitating a sale.

Keyser’s global platform—spanning 600+ professionals and international partners worldwide—enables comprehensive benchmarking of property values, lease rates, and investor appetite across multiple regions. Advisors draw on global transaction data and financial modeling to assess market timing, tenant credit impact, and total occupancy cost implications.

Crucially, Keyser is AI-enabled. The firm uses artificial intelligence and data analytics to forecast market trends, compare investor pricing models, and identify optimal lease structures for each client. This AI-driven insight helps clients evaluate scenarios with greater accuracy and speed, reducing uncertainty and improving negotiation leverage.

With international coverage and full-service capabilities—including transaction management, valuation, lease negotiation, and project oversight—Keyser manages every aspect of the sales leaseback process from analysis to execution. Its advisors collaborate across markets to ensure consistency, transparency, and alignment with corporate objectives.

Because Keyser never represents landlords or investors, clients can trust that recommendations are impartial and based entirely on achieving the best economic and operational outcomes for the tenant.

Turning Real Estate into Strategic Capital

A sales leaseback isn’t simply a financial transaction—it’s a strategic reallocation of capital. When structured thoughtfully, it allows occupiers to free liquidity, maintain control, and improve balance-sheet health without sacrificing location stability.

Keyser’s global, AI-driven, and conflict-free model gives companies the analytical power and advocacy needed to determine when this approach truly makes sense—and how to execute it for maximum long-term value.