Compare · sale-leaseback vs refinance
Sale-leaseback vs refinance
Same building. Two products. One keeps the deed and adds a note. The other sells the fee and replaces the mortgage payment with rent you write first.
Written by Dwaine Clarke , Founder & Principal Broker, American Net Lease, LLC Reviewed
On this page: The honest answer · Side by side · When each wins · Together · FAQ
The honest answer
One paragraph, then the table
Refinance is usually the better tool when cheap debt still has capacity, you do not need proceeds above what a lender will advance, and you want the residual. A sale-leaseback is usually the better tool when you need equity — not just loan proceeds — and you will accept a long occupancy obligation in exchange for a larger check and no new real-estate guarantee.
Operators most often weigh this in Car wash , Convenience & fuel , and Restaurants & QSR franchisees . It pairs most often with paying off a maturing loan and expansion capital without new debt . Run the sale-leaseback calculator for a first pass, then request a Portfolio Capital Analysis.
Side by side
Proceeds, residual, and what you still own
| Topic | Sale-leaseback | Refinance |
|---|---|---|
| Proceeds | Up to 100% of value | Typically 60–75% LTV |
| Balance sheet | No new debt on the real estate | New debt, new covenants |
| Personal guarantee | None on the real estate | Usually required |
| Control of the site | Lease you author: term, options, escalations | Ownership, subject to lender |
| Cost of capital | Priced as a cap rate on rent you can support | Priced as interest, points, and covenants on a note |
| Timeline | Analysis in 48 hours; close follows lease, title, and the buyer | Appraisal, committee, and the lender's close calendar |
| Upside in the dirt | Given up | Kept |
When Sale-leaseback wins
When the sale-leaseback is the cleaner tool
You need a check larger than a lender will advance against the same cash flow. Growth capital, a recapitalization, or retiring a note that will not refinance cleanly are the usual reasons — not a headline cap rate.
You do not want another personal guarantee on the real estate, or you want the operating company and the deed separated before a partner or a buyer shows up.
When Refinance wins
When refinancing the same building is the cleaner tool
You already have cheap debt, strong coverage, and no need for proceeds above the advance. You keep residual value, depreciation, and the option to sell later into a tighter cap-rate market.
The cost you are willing to carry is leverage and a maturity date, not a permanent rent obligation. American Net Lease does not refinance the loan; this page exists so the alternative is stated honestly.
Both together
Different roofs can take different products
Operators often refinance the boxes that still have cheap capacity and sell a first tranche of the ones that need equity. That only works if each roof is modeled on its own coverage and its own note.
The sale-leaseback calculator is a first pass on value minus a stated loan balance. The Portfolio Capital Analysis is where refinance-versus-sale gets written per location — including prepayment penalties the calculator ignores.
Questions
Sale-leaseback vs refinance FAQ
Is a sale-leaseback just an expensive refinance?
No. A refinance is debt against a deed you keep. A sale-leaseback is a sale plus a lease. The occupancy cost can be higher or lower than debt service; the honest comparison is proceeds today, occupancy cost over the hold, and what you still own when the term ends.
Who prices the cap rate versus the interest rate?
The lender prices a loan. A net-lease buyer prices a lease. Those are different markets. Do not convert one into the other with a rule of thumb and call it analysis.
Can I refinance now and sell later?
Yes, if the new loan allows it and the prepayment math still works. Some operators use a refinance as a bridge and a sale-leaseback as the later recapitalization. The second trade has to be possible on the documents you sign for the first.
How do I start?
Request a confidential Portfolio Capital Analysis. Current debt, payoff timing, and last year's site-level earnings are enough to start. Call (239) 236-2626.
Get a confidential read on sale versus refinance, per roof.
Current debt, payoff timing, and last year's site-level earnings are enough to start.