While the data in this report predates the more cautious sale leaseback environment that emerged shortly after, the first quarter of 2022 saw general middle market M&A volume decline from Q4'21 levels, though activity remained well above prior year figures, with average leverage multiples ticking down slightly, suggesting more conservative lender views on the horizon. Even as companies' cost of capital began to widen, sale leaseback multiples remained highly attractive in the mid teens, and the firm revised its estimated cap rate range modestly upward from historic lows, reflecting the shifting rate environment while still preserving an attractive arbitrage between business and real estate multiples. Pitch activity, a leading indicator for future dealmaking, remained strong, pointing to anticipated heightened activity over the following quarters.
