Industrial & Manufacturing Sale-Leaseback Financing
For owner-occupied manufacturing, assembly, cold storage, and logistics facilities, corporate real estate represents substantial trapped capital. Through an industrial sale-leaseback, the operating business sells the physical facility to a real estate investor while simultaneously executing a long-term (15 to 20-year) absolute triple-net (NNN) lease to remain in full operational control. BancorpOne finances both sides of the transaction: providing acquisition debt to institutional buyers and structuring sale-leaseback recapitalizations for corporate sponsors.
Indicative Underwriting Matrix
Sale-leaseback underwriting evaluates both physical real estate alternative-use value and the operational creditworthiness of the corporate tenant.
Unlocking 100% Equity to Fund Operational Expansion and M&A
Commercial mortgages typically cap leverage at 65% to 75% LTV, leaving significant equity locked in the building. An industrial sale-leaseback monetizes 100% of the property fair market value at an attractive capitalization rate, providing tax-efficient liquidity to retire high-cost corporate debt, fund plant equipment acquisitions, or finance strategic corporate mergers.
BancorpOne works with corporate chief financial officers and private equity sponsors to structure favorable lease terms—including mission-critical sub-leasing rights, equipment replacement authorizations, and repurchase option windows—ensuring the company never risks operational interruption.
- Extracts 100% of real estate asset value without incurring traditional debt covenants
- Rental payments are fully deductible as ordinary operating expenses for corporate tax purposes
- Sellers maintain total operational autonomy under standardized institutional NNN lease agreements
- Buyers secure long-term, inflation-protected cash flow backed by essential manufacturing operations
Evaluating Corporate Credit and Alternative-Use Real Estate Fundamentals
Underwriters balance credit risk and real estate risk. If the tenant is a specialized heavy manufacturer, the facility is underwritten based on clear ceiling heights, crane infrastructure, electrical power capacity (minimum 2,000+ amps), and loading dock ratios to ensure robust secondary tenant demand in a vacancy scenario.
Frequently Answered Financing Questions
Verified answers to common borrower and broker inquiries regarding loan sizing, guidelines, and execution.
Why do industrial companies choose a sale-leaseback over a commercial cash-out refinance?
A cash-out refinance caps proceeds at 65-75% LTV, while a sale-leaseback extracts 100% of fair market equity without creating balance-sheet debt.
The corporate seller transforms real estate into liquid working capital while locking in 15-20 years of occupancy control.
Model Sale-Leaseback Value →What lease structure is required for industrial sale-leaseback financing?
Institutional buyers and lenders require an absolute triple-net (NNN) lease with 15-20 year duration and 2-3% annual rent escalations.
The tenant remains responsible for all property taxes, hazard insurance, roof, structure, and maintenance expenses.
Review Lease Guidelines →