Sale and leaseback agreements are common in commercial real estate. You may be wondering, “What is a sale leaseback agreement?” This type of contract is an arrangement that can benefit both parties in the commercial real estate transaction. Before you consider a sale leaseback in Oklahoma, make sure that you understand precisely what it entails and if it fits your needs.
What Is a Leaseback Agreement?
Commercial real estate lease back agreements are perfect when an investor is looking for a property that already has a tenant, and the seller wants to stay in their current location but no longer own the property.
With a sale and leaseback agreement, the seller receives funds from the transaction, which adds liquidity to their finances. The buyer now has a tenant who is happy with the property from the start of the relationship. The rental agreement begins at the time of the sale, so everything is clear between the two parties from the moment the agreement is signed.
What Does a Real Estate Lease Back Agreement Entail?
- Before entering a sale leaseback in Oklahoma, vet the other party carefully. Most leases will last for five to ten years, which means that you will be working with them for quite some time, so you want someone who is financially stable.
- This type of lease agreement often comes with a standard triple net lease, which means that the tenant will be responsible for all of the expenses associated with the property. This includes taxes, maintenance, insurance, and other incidentals.
- In some cases, the seller will want to negotiate an option to purchase the property back at a later date.
The answer to what is a leaseback agreement is not complicated, and the arrangement can work well for both parties under the right circumstances. If you have any questions about leaseback agreements, please contact us. We are always happy to answer any questions and help you decide if a sale leaseback is the correct choice for you. If you choose to move forward, Horizon Commercial Real Estate understands the market and can help negotiate a deal that will meet your needs.