Entering 2022, inflation, interest rate hikes, and the war in Ukraine emerged as prominent macro concerns, though the sale leaseback market showed few signs of slowing after a banner 2021 that closely tracked a record setting year for M&A more broadly. Even as companies' cost of capital began to widen, sale leasebacks remained a highly attractive alternative given effective multiples in the mid teens, supported by a favorable arbitrage between business and real estate multiples across many middle market sub-sectors. The industrial segment continued to command an outsized share of activity relative to its pre-pandemic norms, a trend sustained through the fourth quarter of 2021. For the full year 2021, 790 sale leasebacks generated a total of $24.3 billion of proceeds, up 56% by deal count and 92% by dollar volume over 2020, and nearly reached the 795 deal count and $27.5 billion of volume in what was a banner 2019, the highest year on record since SLB Capital Advisors began tracking the market. The industrial segment continued its heightened deal volume. In 2018 and 2019, industrial properties contributed 41-42% of overall sale leaseback activity. Over the last two years, partially driven by headwinds in the office and retail sectors, industrial ticked up to comprise 54% and 48% in 2020 and 2021, respectively, of all sale leaseback activity.
