Sale-leaseback benefits
Appropriate Structuring
Sale-leaseback transactions allow companies to replace illiquid assets with cash. Northcliffe has deep experience in tailoring transactions to meet the ongoing operational requirements of its tenants. Through appropriate lease structuring, tenants are able to retain complete operational control of their assets. Northcliffe acts as a long-term financial partner for its tenants for property expansions or repeat transactions, and is generally considered a “hands off” landlord, affording companies the same flexibility as before the transaction.
Benefits for Sponsors
Northcliffe can invest in transactions with private equity sponsored companies. Proceeds from a sale-leaseback can be used to finance the buyout or as a way of refinancing existing portfolio companies. Sponsors cite numerous benefits to sale-leaseback transactions:
- Reduced equity commitment from equity sponsor/ acquirer
- Increased return on invested capital (ROIC)
- Extended duration of “third party” financing
- Multiple arbitrage since property sold at higher multiple than company cash flows