AC26: Commercial Sale Leasebacks, Leasing, and Real Estate Issues Rising in M&A Transactions

Commercial Sale-Leasebacks, Leasing, and Real Estate Issues Rising in M&A Transactions create a multitude of unique and often unforeseen risks and opportunities. Sale-leaseback transactions act as a powerful financing tool, allowing businesses to monetize real estate assets while retaining operational control through long-term leases before, during and after an M&A Transaction or through internal succession. We will address key leasing challenges—such as lease assignment, landlord consent, lease structuring value drivers, change-of-control provisions, and due diligence hurdles—that can delay closings, impact (positively or negatively) property value, and inadvertently cause real estate illiquidity.  We outline strategies for owners of business real estate and their advisors including securing investment grade leases, timing separate dispositions, structuring around scenarios when the business owner elects to retail the business real estate as owner/landlord after the going concern is sold, and analysis for potential valuation impact of bundling properties with the operating company sale.