What Is a Sale-Leaseback Transaction?

By Matthew DiLallo – Updated Nov 9, 2025 at 12:38 PM

Key Points

Sale-leaseback allows asset owners to sell property and lease it back, freeing up capital.
This transaction benefits sellers by enabling continued use while unlocking funds.
Buyers gain a property with a cash-flowing, long-term tenant immediately.

A sale-leaseback transaction allows owners of real property, like real estate, to free up the balance sheet capital they've invested in an asset without losing the ability to continue using it. The seller can then use that capital for other things while the purchaser owns an immediately cash-flowing asset.

Loading paragraph...

Infographic defining sales leaseback transactions — Image source: The Motley Fool

Loading image...

Loading paragraph...

Loading pitch...

Loading paragraph...

Loading pitch...

Loading paragraph...

Real Estate Investing

A complete guide.

Basics of Real Estate

What you need to know to get started.

Commercial Real Estate

6 things to know before investing.

Real Estate Investment Trusts

What REITs are and how to invest.

Loading hub_pages...

Related investing topics

Likewise, the purchaser/lessor also experiences several benefits from a leaseback transaction, including:

Ownership of a cash-flowing asset, backed by a long-term lease.
Ownership of a property with a long-term lease to a tenant that needs it to support its operations.
The ability to deduct depreciation expenses on the property on their income taxes.

Loading paragraph...

Loading pitch...

About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

TMFmd19

@MatthewDiLallo

The Motley Fool has a disclosure policy.