View the article from October 21, 2021 at GlobeSt.com
- Sale leaseback deal volume increased in Q2 this year by 93% versus the same period one year ago. On a sequential basis, deal volume was up 17%, according to an analysis by SLB Capital Advisors.
- According to its managing partner, Scott Merkle, declining cap rates, anticipated tax changes and heightened M&A activity, drove the higher deal volume.
- Merkle added, “We anticipate the momentum seen in the first half will continue during the second half of 2021.”
- From a transaction standpoint, SLB Capital Advisors reported that sale leaseback activity increased 17% to 185 transactions in Q2 2021 vs. the previous quarter, reaching $3.6 billion, the second largest transaction count and dollar volume since Q4 2019.
- “While we witnessed a return to optimism in the retail segment, Q1 and Q2 this year exhibited continued strength in the industrial segment, representing 53% of overall transactions – industrial sale leasebacks continue to demand attractive pricing even in non-core markets,” according to the report.
- Larger notable deals in Q2 include Benderson Development’s acquisition of the Kroger Co.’s retail properties for $487mm and Gaming & Leisure Properties acquisition of two entertainment locations from Bally’s Corporation for $484mm.
- Given heightened M&A activity leading into the second half of 2021, SLB Capital Advisors expects sale leaseback activity to follow suit.