Today’s Grocer tapped SLB Capital Advisors’ Partner Malik Franklin for perspectives on sale leasebacks in the grocer sector
A sale leaseback allows a grocer to sell owned real estate, such as store locations or distribution facilities, to an investor, and then lease it back under a long-term agreement that typically ranges from 15 to 20 years, often with multiple renewal options that can extend occupancy well beyond 30 years
This transaction structure allows grocers to maintain control of their facilities while unlocking the capital tied up in real estate, which can then be redeployed into store remodeling, technology, expansion, or debt reduction.
For grocery operators that own real estate, the current environment presents a compelling window . . . Operators that extract the most value from these transactions are those that approach them strategically, aligning lease terms with long-term operating needs, preserving flexibility for future growth or ownership transition, and working with advisors experienced in the sector.