The Journal of Real Estate Research (via Zicklin School of Business at Baruch College
C.F. Sirmans of Florida State University and Barrett A. Slade of Brigham Young University have just published a research paper in the current issue of The Journal of Real Estate Research on the pricing of sale leaseback transactions in the United States. The report is entitled "Sale-Leaseback Transactions: Price Premiums and Market Efficiency." An abstract of the paper is provided below. The entire paper can be downloaded here.
Sale-leaseback transactions are ubiquitous in real estate markets in the United States with annual volume estimated to be greater than $7 billion. However, there is no evidence concerning the price impact of such transactional arrangements. Using a data set of sale-leaseback transactions, this study examines the price impact on commercial property transactions across seven markets. The findings reveal that transactions structured as sale-leasebacks occur at significantly higher prices than market transactions. In addition, after accounting for income differentials, buyers and sellers are appropriately pricing the transactions resulting in no undue advantage to either party, that is, the expected price premium is accounted for in the sale-leaseback prices.
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