💸 Sell, Stay & Scale: How Leaseback Financing Works for CRE Owners 🏢

🔁 Leaseback Financing Explained: Unlock Equity Without Moving Out 💼

July 24, 2025•2 min read

🔁 Leaseback Financing Explained: Unlock Equity Without Moving Out 💼

💸 Sell, Stay & Scale: How Leaseback Financing Works for CRE Owners 🏢

🔁 What Is Leaseback Financing? How It Helps Commercial Property Owners Unlock Capital

Leaseback financing, also known as a sale-leaseback, is a creative commercial real estate strategy where an owner sells their property and simultaneously signs a lease to remain as a tenant. It's a powerful tool for business owners, investors, and developers looking to free up capital without disrupting operations.

🔍 How Leaseback Financing Works

Imagine you own a commercial building worth $2 million. Instead of taking out a loan, you sell the building to an investor but stay in the property under a long-term lease. You receive a lump sum of capital from the sale and continue running your business without interruption.

✅ Benefits of Leaseback Financing

· Unlock Equity: Convert real estate equity into cash without relocating.

· No Operational Disruption: Stay in the property with a long-term lease.

· Tax Advantages: Lease payments may be tax-deductible as a business expense.

· Improved Balance Sheet: Removes a depreciating asset and may improve financial ratios.

· Attract Investors: Investors enjoy stable, long-term income from creditworthy tenants.

🏢 Ideal Candidates for Leaseback Financing

· Business owners who own their commercial property and want liquidity.

· Medical, dental, and veterinary practices looking to invest in operations or expansions.

· Developers exiting stabilized properties.

· Investors looking to offload property but maintain occupancy.

⚠️ Considerations & Risks

· Rent Commitments: You’ll still be responsible for lease payments, often for 5–20 years.

· Loss of Appreciation: You no longer benefit from property value growth.

· Control Trade-Off: You're now a tenant and subject to lease terms.

📈 Strategic Use in Commercial Real Estate

Leaseback financing is commonly used in:

· Medical and dental office sales

· Industrial and warehouse properties

· Retail owner-occupied properties

· Build-to-suit exit strategies

It’s especially attractive in high-demand areas like Houston, Katy, and Fulshear, where property values are strong, and investors are eager for reliable income streams.

https://www.houstonrealestatebrokerage.com/

https://www.houstonrealestatebrokerage.com/houston-cre-navigator

https://www.commercialexchange.com/agent/653bf5593e3a3e1dcec275a6

http://expressoffers.com/[email protected]

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https://author.billrapponline.com/

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Bill Rapp, CRE Broker

I am a Houston commercial broker, with residential experience, as well as a lending background. I have been in the real estate industry for 14 years and counting, and I have worked in many roles within the industry and each has given me a unique perspective of the industry as a whole. My dedication to clients is rooted in this industry knowledge, but also includes my desire to go the extra mile in networking to source off market opportunities for my clients. Me and my team at eXp Commercial have a cutting-edge technology package that gets the widest exposure for each transaction. eXp Commercial offers a nationwide network through which we can deliver the best exposure and professional advice to achieve our clients’ goals while also minimizing their risk. Clients appreciate my methodical method of discovery in our initial consultation. Through which we can get to know each other and their specific’s business’s needs and objectives on a granular level. Our processes help navigate each transaction and its potential pitfalls through to a successful outcome for our clients. It is my stated goal to provide our clients with extensive market analysis and expertise that fosters innovative solutions and rewarding commercial real estate opportunities.

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