Insights · Owner guide
Sale-leaseback: how an owner-operator unlocks capital without moving.
You own the building your business runs from. A sale-leaseback converts that equity to cash, keeps you in place under a long-term lease, and moves ownership responsibilities to a landlord. Here is how it works and when it makes sense.
Insights › Sale-leaseback: how an owner-operator unlocks capital without moving.
What a sale-leaseback is
You sell the property to a buyer and, at the same closing, sign a lease to stay. The business keeps operating without interruption; the balance sheet changes from owning real estate to renting it. The buyer takes on the roof, the capital planning, and the ownership risk.
When it makes sense
Owners typically consider it when the equity in the building is worth more deployed in the business—new equipment, a second location, paying down expensive debt—or when the next generation does not want to own real estate. It also suits owners approaching a sale of the business itself: buyers of a company often prefer to rent the building rather than buy it.
How rent and term are set
Rent is set to a market rate for the space, not to the price. A longer initial term (often ten years or more) with renewal options gives the operator security and gives the buyer a predictable asset; that predictability is part of what the buyer pays for. Expect a net lease where the tenant handles day-to-day maintenance, taxes, and insurance, with the landlord responsible for structure and roof unless negotiated otherwise.
Questions to ask before you sign
Who is the buyer, and will they still own the building in ten years? What happens at the end of the term? Are renewal rents fixed, indexed, or reset to market? Who pays for capital items like HVAC replacement? Can you assign the lease if you sell the business? Is the buyer a principal with its own capital, or an intermediary who must find one?
How Kumo approaches it
Kumo buys for its own account and intends to hold. We underwrite the property and the tenant together, write leases at arm’s-length market terms, and coordinate the closing with an independent Texas title company so the sale and the lease close on the same day without gaps. (Kumo Title, our planned affiliated title agency, is not yet open and is not handling closings.). If a sale-leaseback of an owner-occupied building in Central Texas is on your mind, tell us about the property.
Information on this website is general and is not legal, tax, investment, or financial advice. Nothing here is an offer to buy, sell, lease, or develop property, or a promise of approvals, entitlements, timing, or returns. Terms are confirmed only in a written agreement.
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