Transforming hidden reserves into strategic capital

Many companies continue to carry operational real estate on their balance sheet at historical cost, while the market value (fair value) is significantly higher. A sale-and-lease-back makes these hidden reserves usable. However, the success of the transaction stands and falls with the valuation of the rental conditions, as these determine the multiplier for the sales proceeds.

In an SLB scenario, the valuation is more complex than in a standard sale. This is exactly where our expertise comes in:

• Rental value appraisals (Market Rent Analysis)
  A rent that is set too low gives away capital, while a rent that is too high jeopardizes the operating margin (EBITDA) and lowers the tenant's creditworthiness. We determine the "sustain-able rent" that is attractive to the investor and sustainable for your company in the long term.
• Structuring of the exit yield:
  The buyer (investor) calculates his purchase price based on a cap rate model. Through our well-founded analysis of the third-party usability and the remaining useful life , we reduce the investor's risk premiums. The result: higher sales proceeds with the same rent burden.
• Technical Asset Audit (Capex Modeling)
  We assess the maintenance backlog and ESG compliance. By precisely quantifying future investment needs, we create price transparency and prevent "last-minute" discounts in due diligence or, in the case of triple-net contracts, provide planning security for the seller.
• Runtime Optimization
  We simulate how an extension of the lease term from 10 to 15 or 20 years affects the property value – and compare this with the costs of long-term commitment.
• Tenant creditworthiness
  In addition to the classic property-specific parameters (location, market, property), a well-founded assessment of tenant creditworthiness is playing an increasingly important role, especially in SLB transactions. As part of their risk analysis, investors are looking for reliable data to assess the economic situation of the tenant that goes beyond freely accessible sources. Together with you, we compile the necessary information and thus provide significant support for the investment decision-making process.

The real estate valuation provides the database on which the debt advisory builds the new financial architecture and embeds it in your requirements:

• Corporate Rating Simulation
  Through our access to a BaFin-licensed rating tool, we can simulate the effects of the sale and leaseback on the company's creditworthiness and structure the transaction profitably.
• Debt Compliance
  An SLB is often made in the context of existing financing agreements. We analyse existing financing agreements and structure communication in such a way that planned SLB proceeds can serve the intended purpose. Modelling the impact of the SLB transaction ensures that agreed key financial figures, including headroom, are adhered to or adjusted in terms of planning.
• Network
  Depending on the nature, size, location and volume, we identify suitable financing partners from our network. With well-prepared documents and a comprehensible debt story, the planned transaction will be placed in a way that is appropriate for the addressee.
• Transaction Management
  Based on our extensive experience, we can act with foresight, optimize the conditions for you and make the transaction a success. We coordinate all necessary parties and accompany you until the transaction is paid out.

• Objectivity & Market Acceptance
  We provide you with reviews that enjoy the highest level of acceptance among institutional investors and banks. Together with well-prepared documents for the market approach, this accelerates the transaction process considerably.
• Flexibility through clauses
  We integrate valuation-relevant aspects such as buy-back options or expansion rights directly into the SLB construct and identify adjustments to existing financing agreements in order to secure the long-term utility value of the property and your operation.
• 360° know-how
  The combination of in-depth real estate and financing know-how is the basis for a successful transaction.

A sale-and-lease-back is much more than a balance sheet reduction. It is a highly complex transaction whose success is based on the duality of real estate expertise and financing expertise. While our specialists from the Real Estate Valuation department make the property investor-ready by means of precise rent and yield analyses, Debt Advisory strategically embeds this asset in the capital structure. Only this interdisciplinary validation service converts 'dead stones' into sustainable capital and secures your company the necessary liquidity with maximum operational flexibility.

A sale-and-lease-back is not only an instrument for short-term liquidity generation, but also enables a sustainable optimisation of the capital structure through precise preparation and targeted embedding in existing financing.

Real estate as a strategic financing instrument
Many companies continue to carry operational real estate on their balance sheet at historical cost, while the market value (fair value) is significantly higher. A sale-and-lease-back makes these hidden reserves usable. However, the success of the transaction stands and falls with the valuation of the rental conditions, as these determine the multiplier for the sales proceeds.