Sale-leaseback · owner-occupied industrial
Industrial Sale-Leaseback: your plant is the lowest-yielding asset you own.
For operators who own the plant or warehouse under a cash-flowing business. The building earns an implicit cap rate. Growth, succession, and acquisitions are priced as debt. This page stays out of the index until the American Net Lease book can publish a qualifying industrial cell.
Written by Dwaine Clarke , Founder & Principal Broker, American Net Lease, LLC Reviewed
On this page: What you're solving · What it trades for · The lease · Objections · Example · FAQ
What you're really solving
Three problems the building can pay for
Owner-occupied industrial is often the largest unlevered asset on the balance sheet and the worst-returning one. A sale-leaseback is how operators stop treating the box as a trophy and start treating it as a capital account.
Strategic and PE buyers price the business. The building rides along as leftover real estate unless you write the lease and sell it as a net-lease product.
Buying the plant next door — or buying out a partner — is a real-estate problem as often as it is an operating-company problem. Freeing the box keeps the floor running.
Lease engineering
The lease investors expect for a plant — and what each term costs you
| Term | What the buyer wants | What it means for you |
|---|---|---|
| Primary term | Long — supports a tighter cap and higher proceeds | Occupancy cost locked longer; renewals are your protection |
| Structure | Absolute NNN | Operations do not move; specialized process improvements stay with the tenant |
| Escalations | Annual or periodic bumps | Cap them; model rent against a normal volume dip, not a peak production year |
| Rent coverage | Operating EBITDA comfortably above rent | The honest test of how much rent the plant can carry — we model it before pricing |
The objection
"No one wants a special-purpose plant."
Some boxes will not clear as net lease. That is a coverage and replaceability question, not a reason to invent a cap rate. When the lease the operation can actually support would clear a buyer, the plant is a product. When it would not, we will say so.
What does kill a deal: rent the operation cannot earn after a down year, and a term so short the buyer is pricing a vacancy in a hard-to-relet box. We model both before anything is marketed.
Worked example
An owner-occupied plant, one building, a second facility under review
Illustrative — not a closed transactionQuestions
Industrial sale-leaseback FAQ
Why call the plant the lowest-yielding asset?
Because owner-occupied real estate often sits unlevered while the operating company pays growth-debt rates for the next machine or the next building. That is a capital-allocation observation, not a published cap rate. This page has no industrial cell until the book does.
Can a special-purpose building sell as net lease?
Sometimes. The test is whether a buyer will underwrite the lease and the operator with a use that is hard to relet. We will not invent a yes. The analysis is where that call gets made.
What happens to operations after the sale?
You keep occupying, on the lease you wrote. The floor does not move. What changes is who holds the deed and who collects the rent.
How do I start?
Request a confidential Portfolio Capital Analysis. Location, current debt, and last year's operating earnings are enough to start. American Net Lease offers delivery within 48 hours of a complete submission.
Get a confidential read on your building in 48 hours.
Location, current debt, and last year's operating earnings are enough to start.