Purchase / Leaseback
Purchase–Leaseback Financing Strategy
Our purchase- or construction-leaseback strategy is a creative financing option that helps operators turn around distressed assets.
With our combined expertise in the industry, we can:
- Identify undervalued assets
- Leverage our extensive network of banks and lenders
- Provide experienced managers and oversight to execute on the plan
How It Works
- An operator partners with CFG to acquire a facility or complete a project with little or no equity needed from the operator.
- Post acquisition, CFG owns the real estate and the client owns the operator that leases the facility.
- The client can then buy back the facility from CFG within three to five years.
Typical Lease Terms
At the time of the purchase, the operating and property companies will be separated, with the client owning the Opco and CFG owning Propco. The lease is the most significant document between CFG and the client. Typical lease terms include, but are not limited to:
- NNN Lease (a triple net lease, Net-Net-Net)
- Escalating rent payments
- Lease payments are a function of purchase price and other terms desired by the operatorCFG, as landlord, receives operating statements, occupancy statistics and health surveys so as to ensure the continued viability of the operations and compliance with applicable regulations
Buy Back Sale Agreements
At the time of the purchase, a sale agreement may be entered into by CFG and the operator. There are many decisions that impact the form of the sale agreement, such as the pricing of the sale. The options include, locking the price or the cap rate, pricing at the market or other pricing mechanisms. The method chosen may impact some of the lease terms.
Learn More About CFG’s Purchase-Leaseback Strategy
We’re committed to providing a financing alternative that encourages facility ownership for the client within a reasonable time frame.
To learn more about this innovative financing option, please contact Mike Coiro at 410-513-8716 or Steve Thomes at 410-513-8741.