CP Capital Group portfolio

Benefits of a Purchase-Leaseback:

A Purchase-leaseback with Corporate Partners offers the following potential benefits:

  • The purchase price, lease term and rent structure can be tailored to meet the needs of the seller.
  • The company can maintain long-term control of the operation and management of their facility.
  • The transaction can be structured as an outright purchase, or in the case of a new development, as a forward commitment, which may facilitate the seller's needs for interim financing.
  • The cash proceeds from the sale can be put to more productive uses such as investing in the company’s higher growth core businesses, reducing debt, repurchasing company stock, or returning it to investors.
  • The company frees up illiquid, fixed assets carried on the books at depreciated value, converting them into cash at market value.
  • Cash proceeds are recognized on the balance sheet while on-going lease obligations are structured for off-balance sheet treatment.
  • The company will be able to deduct rental payments in full for income tax purposes.
  • As opposed to raising capital through new debt or equity offerings, the purchase-leaseback can be consummated quickly.
  • Unlike traditional real estate mortgage/debt financing, a purchase-leaseback results in 100% cash proceeds, compared to 50-75% proceeds. With mortgage/debt financing, the company continues to have 25-50% of the property value carried as a fixed asset on the books.
  • As opposed to a synthetic lease, The Purchase-leaseback is a long-term, more robust solution that can be applied to both new and existing properties, and has not been the subject of regulatory scrutiny and the resulting uncertainty.
  • The company avoids the risks of real estate ownership related to property value and the cost and availability of debt financing.