Whats the Attraction of the Net Lease Arrangement?
By Gary M. Ralston, CCIM, SIOR To most users of real estate, the control and use of a property is all that is necessary. That said, actually owning the property isn’t always necessary to achieve those goals. With leasing, users can control and use properties without actually owning them. To that end, many property owners choose to execute sale-leaseback transactions and enter into net lease arrangements on their properties. In a sale-leaseback, sellers can convert illiquid assets into cash while still retaining use of the properties. Essentially, the user sells the property to an unrelated third party and then enters into a lease for the property for a mutually agreeable term or time period. Many companies use net leases. One example is Pier 1 Imports, where Rick Blackwelder, vice president of real estate and development, uses net leases to finance new stores, seeking favorable lease terms, minimum red tape, flexibility in the lease, and a financially strong reliable lessor. What Is a
