Canadian Metalworking: Understanding Sale Leasebacks

June 22, 2022 - SLB Capital Advisors outlined key sale leaseback benefits and considerations with Canadian Metalworking.

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Canadian Metalworking: Understanding Sale Leasebacks

SLB Capital Advisors outlined key sale leaseback benefits and considerations with Canadian Metalworking.

  • SLB Capital Advisors Partner Stephen Cheng outlined key sale leaseback benefits and considerations with Canadian Metalworking
  • “SLBs offer metal manufacturers a unique arbitrage opportunity because of the current premium valuation of industrial real estate when compared to traditional transaction multiples in real estate. This differential allows manufacturers to cash out of real estate at high proceeds to reinvest in their business and fuel growth in their core operations”
  • “At its core, a [sale leaseback] is the sale of your manufacturing facility and then a simultaneous “leaseback” of the property to you from the new owner”
  • “While SLBs always have been worth considering, for manufacturing companies, they are particularly worth evaluating in today’s market. For a variety of reasons, industrial properties are highly attractive assets, and a manufacturer might be able to sell their property they might not be able to realize for quite some time”
  • “With the incredibly high valuations of industrial real estate in today’s market, an SLB transaction is worthy of consideration. For many metal manufacturing companies, there may be an opportunity to tap into the capital under the shop floor.”
  • Read the full article here.