In this episode of the M&A Mastermind podcast, host Nick Olsen interviews Dan Andrews, the managing partner and CEO of Tempus Realty Partners, about sale leasebacks in M&A transactions. They discuss the benefits and considerations of sale leasebacks, the timing and planning involved, and the potential tax advantages. Andrews emphasizes the importance of understanding the real estate involved in a transaction and determining if a sale leaseback is a good fit. He also highlights the limited pool of buyers for sale leasebacks and the need for proper due diligence and financing. Overall, the episode provides valuable insights for M&A advisors and business owners considering sale leasebacks.

Takeaways

• Sale leasebacks should be considered in virtually every M&A transaction involving real estate.
• Timing and planning are crucial for successful sale leasebacks, and it is often best to sell the real estate before selling the business.
• Working with a specialized buyer, such as Tempus Realty Partners, can increase the likelihood of a successful sale leaseback.
• Proper due diligence, including property condition assessments, environmental assessments, and surveys, is essential to mitigate risks.
• Long-term leases with market-rate rent and annual increases of around 3% are typically the most attractive to buyers.
• Sale leasebacks can offer tax advantages, such as 1031 exchanges, if properly planned and executed.

Chapters

00:00 - Introduction and Overview

09:38 - Timing and Planning for Successful Sale Leasebacks

26:49 - The Limited Pool of Buyers for Sale Leasebacks

35:38 - Optimizing Value with Long-Term Leases

Sale leasebacks, M&A transactions, real estate, timing, planning, tax planning, due diligence, financing