2022 Seen as Record Year for Sale Leaseback Activity
February 6, 2023 – SLB Capital Advisors shared perspectives with Commercial Real Estate Direct regarding 2022 sale leaseback activity
2022 Seen as Record Year for Sale Leaseback Activity
Through the third quarter, 660 deals totaling $23.9 billion took place, according to SLB Capital Advisors of New York
Capitalization rates, which determine the prices that investors pay for properties, have increased by roughly 100 basis points from last year, according to Scott Merkle, co-founder and managing partner of SLB. But the cost for most companies to borrow has increased substantially.
“While all forms of capital became more expensive in 2022, the cost of sale leasebacks did not rise as dramatically, and presented a much more attractive capital allocation tool,” [Merkle] said. On a relative cost of capital basis, he said, “it’s more attractive now than a year ago” to complete a sale leaseback transaction.
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