Sale Leaseback

Last Updated: Jun 7, 2019

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A transaction where a company will sell an asset, usually a large fixed asset (plane, train, Real Estate) to a leasing/financing company to generate liquidity. However, since the company wants to continue to use the asset, they will sign a lease for that asset upon the sale. An example of this is prominent in the retail sector. Struggling, cash starved retailers will sell their real estate holdings to generate cash , and then rent the properties back from the financing company to continue the normal course of business.