Growing regional retailer faced a classic growth capital challenge: significant expansion opportunities requiring capital investment, but with most wealth tied up in real estate rather than operating business. The flagship Santa Fe location represented substantial equity that could fuel growth, but selling and relocating would disrupt operations and customer relationships. A sale-leaseback structure offered the solution—unlock capital while maintaining operational control—but required careful structuring of lease terms, buyer identification, and protection of the tenant's long-term occupancy interests.
Every complex transaction presents unique obstacles that require creative problem-solving.
Significant equity locked in real estate while business needed capital for expansion into new markets and additional locations.
Must maintain uninterrupted operations at flagship location during transaction and secure long-term occupancy rights for business stability.
Balance investor buyer's return requirements with tenant's need for favorable lease economics, renewal options, and controlled rent escalations.
Structured a sale-leaseback transaction that balanced capital raising objectives with long-term occupancy security. Identified buyer universe seeking single-tenant retail with operator-tenant in place. Negotiated lease terms providing tenant with extensive renewal options, controlled escalations, and tenant improvement allowance for future modifications, while meeting buyer's yield requirements.
Structured sale-leaseback with 15-year initial term and four 5-year renewal options
Negotiated favorable base rent and controlled annual escalations tied to CPI with caps
Secured tenant improvement allowance for future modifications as business evolves
Identified institutional buyer seeking single-tenant retail with strong operator-tenant
Coordinated simultaneous closing of sale and lease commencement to ensure seamless transition
Raised $4.2M in growth capital for business expansion while securing 15-year occupancy with renewal options extending to 35 years total. Tenant achieved favorable lease economics with controlled rent escalations and TI allowance. Seller-tenant successfully deployed capital to open three new locations within 18 months, significantly growing the business.
"The sale-leaseback structure was perfect for our situation. We unlocked capital to grow the business while keeping our flagship location on terms we could live with for decades. Within 18 months we opened three new stores—that wouldn't have been possible without this transaction."
Let's discuss how our experience and relationships can help you navigate complex transactions.