What is leaseback?

A leaseback refers to a specific type of financial transaction where the seller of a property sells it to a buyer and simultaneously enters into a lease agreement to rent that property back from the buyer. This arrangement allows the seller to continue using the property as a tenant while gaining capital from the sale.

One of the primary benefits of a leaseback is that it provides the seller with immediate liquidity from the sale while enabling them to maintain operational control over the property. This can be particularly advantageous for businesses that wish to unlock equity but need to keep their operational premises.

In contrast, the other options do not accurately describe what a leaseback entails. For instance, the concept of selling the property back does not reflect the simultaneous leasing arrangement that characterizes a leaseback. Lowering property taxes is unrelated to the leaseback model, which focuses instead on the leasing and ownership structure. Lastly, while finance is involved, a leaseback specifically emphasizes the seller leasing the property back from the buyer, rather than being a general financial arrangement for property investment.