sale and leaseback

Sale and leaseback

This is a real estate process known in France as "cession-bail", the principle of which is to sell the premises of one's business while maintaining its activity. You therefore go from being the owner of the premises to a tenant.

This process allows you to exploit your real estate assets by selling all or part of your real estate portfolio with the main consequence of freeing up capital and therefore generating a significant cash flow. This approach may be due to a reflection of the company's business. Indeed, a company may not have any expertise in real estate as it is not its business and may feel that it will generate more profit by having the cash to invest or simply develop the business. This is rather than it being "frozen" in a fixed asset despite the fact that the rent it will pay to operate its business within its walls will logically flow out of the business to the new owner. In this way, the company can be said to be refocusing on its core business.

This process can be put in place for other reasons, obviously always linked to the fact that it will provide a certain amount of liquidity. The reasons why a company may need more liquidity can also be to improve the company's balance sheet. But it can also be to benefit from bank leverage, as a large increase in cash flow can allow you to increase your financing capacity.

In order to carry out the "sale and leaseback", you must obviously be vigilant to the professional real estate market. Indeed, with a good knowledge of the market, you can seize the right moment and take advantage of a market context that is favourable to selling at high prices and thus realise a capital gain. This is a phenomenon that has been observed in the post-covid period, when there has been a euphoria on the markets, especially the real estate market.

Most of the time, this means is used to generate liquidity, as previously mentioned, but above all to finance oneself through commercial property. Depending on the level of liquidity required, there are several possible scenarios, which means that one also chooses the proportion of one's business real estate that one wishes to dispose of.

Finally, the desire to reduce debt can also lead to a "sale and leaseback". Indeed, the cash recovered can be used to recover outstanding debts in order to improve the company's debt capacity, which can enable it to borrow again in the near future, notably by refocusing on operations.

Do you want to sell your premises in order to concentrate on running them? Call on the services of your Murs Occupés agency, an expert in its field, which will be able to assess your needs and find you the ideal investor.


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