sale leaseback strategy gaining traction in 2023

Industrial businesses that own their own property have increasingly turned to a financial strategy known as sale leaseback to tap into alternative sources of capital. Rather than borrowing money at relatively high interest rates of 8 or 9%, these businesses opt to sell their property and then lease it back from the buyer at lower rates, typically around 6 or 7%. This approach has gained popularity as a more attractive option in recent times due to the fact that capitalization rates (cap rates) for industrial properties have remained relatively stable, while traditional sources of capital have experienced significant increases. By leveraging the sale leaseback strategy, industrial businesses can access the capital they need at a more favorable cost, optimizing their financial resources and allowing them to focus on their core operations and growth strategies.