Sale Leaseback Commercial Real EstateAdvisory for Owner-Users

What Is a Sale Leaseback in Commercial Real Estate?

Title moves to an investor; a lease, usually long-term triple net, moves to you. The dock, the payroll, and the address are unchanged. Equity locked in the walls becomes cash, and a building you controlled becomes one you occupy on terms you set once.

Who Actually Does a Sale and Leaseback of Commercial Property?

The candidate is an owner-user: a company that owns the building it operates from and holds real equity in it. Manufacturers, distributors, logistics operators, dealerships, medical groups, restaurant operators — anyone whose real estate has quietly become the largest illiquid asset on the books while the business competes for capital. CBRE frames the objective as unlocking trapped capital, and reports one client program reaching $2.6 billion in proceeds at a 5.96% blended cap rate.

CoStar records four named corporate sale-leasebacks in Inland Empire industrial data between April 2025 and January 2026, across four submarkets and a size range of nearly six to one.

Read the range, not the headline. The smallest, 129,704 SF in Rancho Cucamonga, is an ordinary Inland Empire industrial owner-user, not a Fortune 500 balance sheet. The Cencora building was completed in 1991 and held 20+ years — an investor underwrites your lease and covenant, not the vintage. CoStar also tags the UPS trade as both a sale-leaseback and an investment triple net deal: a local data point that IE leasebacks are written NNN.

How the Lease Sets the Price

Price equals net operating income divided by the cap rate, and in a leaseback you write both inputs. The rent you agree to pay is the income; the term, escalations, structure, and your credit are what the investor underwrites. CoStar puts net lease cap rates near 6.5% on average over the last decade, with pricing “shaped by key factors like lease term, tenant credit, vintage, and location.”

Longer term, lower cap rate, higher price — in every sector CoStar measures. A local control case: in December 2025 Brookfield sold a 526,000 SF San Bernardino building to Overton Moore for $123 million, or $234 per SF, at a 5.75% cap rate, fully leased to Kohl’s with 4.5 years remaining. Not a leaseback — it is here because remaining term gets reported alongside price even locally.

Ground your arithmetic in two independent sources. CoStar reports Inland Empire industrial transactions over the trailing 12 months averaging a 5.7% cap rate — low 3.8%, high 7.6% — against a modeled market rate of 4.9%. Kidder Mathews independently reports a 6.0% average cap rate for Q2 2026, and CoStar puts the Inland Empire retail market cap rate at 6.4% (Q1 2026). That width is the argument for structuring the lease deliberately.

Why NNN vs Gross and Your Credit Move the Number

Term is the loudest variable, not the only one. Inside a single sector band, CoStar reports, “individual transactions can fall anywhere from the mid-5s to the 6s based on lease structure and tenant credit.”

Under a triple net (NNN) lease the tenant carries taxes, insurance, and maintenance, so the investor’s income arrives clean — and predictable income is what a low cap rate pays for. Under a gross lease the landlord absorbs them and prices the risk. Before agreeing to a structure, read the types of commercial leases, gross versus net, modified gross, and how CAM charges behave. You are negotiating the expense line you will personally pay for the next decade or two.

The covenant is the other half: the investor is buying your promise to pay for the term, and everything that makes it legible — audited financials, guarantees, operating history — moves the cap rate. It is no accident that all four IE leasebacks in CoStar’s data are recognizable corporate names.

The Rent You Set Is the Rent You Pay

Because price is income divided by cap rate, raising the rent raises the sale price mechanically. An above-market rent inflates today’s proceeds and hands the bill to operations for the whole term. You get paid once; you pay the rent every month.

CoStar’s submarket table places your own building: Inland Empire industrial asking rents run from $0.85 per SF in Moreno Valley/Perris to $1.42 in the Coachella Valley, with Beaumont/Hemet at $0.91 and Corona/Eastvale at $1.23 (Q1 2026); the warehouse cost guide breaks them down further. If a proposed leaseback rent sits above your corridor, you are not being paid a premium — you are pre-paying it.

All 15 Inland Empire industrial submarkets posted negative 12-month asking rent growth in Q1 2026, from −0.5% to −3.0%, with vacancy at 8.6% and availability at 12.2%, a 13-year high. Commit to an above-market rent and you commit to a number the whole market is walking away from.

What You Give Up

A sale-leaseback is not free money. It is a sale, and the consideration is not only cash.

• You become a tenant. Renewal, assignment, expansion, and end-of-term rights stop being decisions and become clauses you negotiated once — see tenant representation and the leasing guide.
• You give up appreciation and control. Whatever the building is worth at term end belongs to the buyer, and alterations, expansion, yard use, and the timing of any future sale run through a landlord.
• Rent becomes a fixed obligation — due in strong years and weak. And above-market rent is borrowed proceeds: it buys price today and costs operating margin every month after.
• Tax and accounting consequences exist — including how the lease itself is treated — and are not a broker’s to opine on.

Sale-Leaseback vs Cash-Out Refinance vs SBA 504

These are not three flavors of one decision. SBA 504 points the opposite direction: a 504 loan finances acquiring and holding owner-occupied commercial real estate, while a sale-leaseback exits ownership.

If your facility is worth materially more than the $5.5 million maximum, a 504 loan cannot address it the way a leaseback can — Apex’s SBA 504 warehouse guide covers the acquisition side. A refinance caps proceeds at what a lender will advance; a leaseback has no lender ceiling, only what the asset is worth to an investor, and the lease sets that. The honest question is how much capital you need and which side of ownership you want to be on.

When a Commercial Sale Leaseback Is the Wrong Move

Pretending every owner-user should do this is how these pages lose credibility. Do not sell and lease back when:

• You need far less capital than the building is worth — selling a $20 million asset to solve a $2 million problem is expensive.
• Your business may outgrow the site inside the term — the term that maximizes your price is the one that traps you.
• Your credit will not carry the term, or only an above-market rent makes the numbers work — which is not a deal, it is a loan on worse terms than a loan.
• You are doing it because nothing else is available — investors read motive, and competing leaseback supply moves your pricing.

Timing: Cap Rates Have Moved Against Sellers

CoStar reports Inland Empire cap rates on logistics sales over $10 million rising approximately 150 basis points, to the mid-5% to 6% range from an average of 4% in 2021–22 — the same income buys a materially lower price today than three years ago. Nationally, net lease deals traded at a 3.6% discount to asking price in 2025. A well-structured lease is the lever left to recover value.

Apex Is a Brokerage — Not a Tax, Accounting, or Law Firm

What Apex Does on a Sale-Leaseback

1. Value the asset. A broker opinion of value from real comparables rather than a modeled rate, and what a realistic rent produces across the cap-rate range actual Inland Empire trades support.
2. Structure the lease to optimize proceeds. Term, escalations, structure, options, and covenant presentation are the price. We model what different terms do to proceeds before anything goes to market, and say plainly when a higher rent buys price you pay back.
3. Run the investor process. Net lease REITs, private capital, and exchange buyers all underwrite the income stream; CoStar names Fortress Net Lease REIT and Bridge Logistics among institutions investing heavily here in 2025.

Apex publishes no sale-leaseback transaction count or dollar volume here, because our approved research set does not substantiate one and we do not print numbers we cannot source. Owners weighing a sale also ask about a 1031 exchange — a separate decision your CPA must run. Quarterly data lives in the Apex market reports.

Assignments are led by Robert Mendieta Jr., CCIM, Associate Broker, California DRE #01422904, whose investment-analysis discipline is what a leaseback valuation requires. Joseph Lombera, Commercial Agent and CMO (DRE #01971957), supports research. Apex also handles landlord representation.

Sale Leaseback Commercial Real Estate FAQ

What is a sale leaseback in commercial real estate?

A sale leaseback in commercial real estate is one transaction with two halves: the owner-user sells the building its business occupies to an investor and simultaneously signs a lease to remain as a tenant. Equity converts to cash, operations continue uninterrupted, and the lease the seller negotiates sets the price.

How does the lease affect the sale-leaseback price?

Price equals net operating income divided by the cap rate, and in a sale-leaseback the seller writes both inputs. CoStar reports net lease pricing is shaped by lease term, tenant credit, vintage and location, and its median cap rate table shows pharmacy assets at 6.15% with 15 or more years of term remaining versus 7.39% under nine years, a 124-basis-point spread, for the prior 12 months as of Q4 2025.

Have any Inland Empire companies actually done sale-leasebacks?

Yes. CoStar records four in Inland Empire industrial data between April 2025 and January 2026: United Parcel Service sold and leased back 765,456 SF in Jurupa Valley for $208.8 million; Nissan sold and leased back 619,999 SF in Moreno Valley/Perris for $132.1 million; Cencora sold and leased back 223,801 SF in Corona for $43.3 million; and China Manufacturers Alliance sold and leased back 129,704 SF in Rancho Cucamonga for $31.7 million. CoStar discloses no cap rate for any of the four.

What happens if I set an above-market rent to raise the sale price?

A higher rent raises the price, and then you pay that rent every month for the full term. Benchmark it first. Kidder Mathews reports Inland Empire average direct asking rents at $0.98 per SF per month on a triple net basis in Q2 2026, down 4.85% from $1.03 a year earlier, and CoStar data for Q1 2026 shows all 15 Inland Empire industrial submarkets posting negative asking rent growth.

Is a sale-leaseback the same as an SBA 504 loan or a cash-out refinance?

No, they move in different directions. An SBA 504 loan finances acquiring and holding owner-occupied commercial real estate; the SBA states a 504 loan cannot be used for working capital or inventory, or for speculation or investment in rental real estate, and caps the maximum loan amount at $5.5 million with a borrower contribution of at least 10% of total project cost. A cash-out refinance keeps you on title and adds a loan limited by what a lender will advance. A sale-leaseback exits ownership entirely.

Does Apex give tax or accounting advice on a sale-leaseback?

No. Apex Real Estate Services is a licensed real estate brokerage, not a tax, accounting or law firm. A sale-leaseback carries tax and accounting consequences, including how the lease itself is treated, and those depend on your entity, your basis and the lease you sign. Engage your CPA and your attorney before signing a letter of intent, and have them review the lease before execution.