Companies Raising Cash Through Sale/LeaseBacks

With the Stock Market crashing to lows not seen for years, and with slowdowns forecast for virtually every sector in the economy, what options are available for companies strapped for cash?
Well one would normally access the credit markets but these have been severely tightened and the money, if any, to be gotten is expensive and usually inadequate in the amounts available.
Thus the rising poularity of Sale/LeaseBack transactions.
What's a Sale/Leaseback?
A Sale/LeaseBack is simply a transaction whereby a company sells off the real estate it owns to either a pension fund, a wealthy investor, or a syndicate of investors for all cash, and then turns around and enters into a Lease with that Buyer on a long-term basis (usually a 10-year time frame).
What does this accomplish for the Company?
Well, it frees up badly need cash for the company to survive the coming economic slowdown. The cash can be, and usually is, a substantial amount as real estate values have climbed dramatically over the last decade and, even though there has been a slowing of price appreciation, the amount of equity in these properties can be quite substantial.
But you say that the company now has to pay a lease!
True, but the investors out there look to get a 8 - 10% return on their capital (depending on what city the the property is located in, as well as the location within that city) so it is not an onerous term. The other benefit is that the Lease is now a cost of doing business and can be written off as part of the overall expenses.
Although not for everyone, Sale/Leaseback transactions can be a great financial tool for those who need to access cash to survive the downturn and then position themselves to prosper during the ensuing economic recovery.
Make sure to get expert legal, accounting, and real estate advice from your professionals before embarking on any proposed transaction.