Post-M&A Industrial Sale Leaseback Generating a ~400% Return

The Assignment

The client, a multinational private equity operator, recently acquired a Florida-based food service company and was seeking a way to unlock liquidity from the mission-critical industrial distribution facility included in the transaction. Dialogue regarding the execution of a sale leaseback incited motivation to generate working capital to reinvest back into the company’s operations and growth. In these situations, finding the best real estate partner for the facility is crucial.

The Process

Recognizing the potential for a sale leaseback to meet the client’s objectives, Matthews agents sought to execute a tailored and discreet off-market process. They engaged a wide spectrum of investors, including qualified private investors, regional family offices, and institutional investors. Within 14 days of launching the marketing campaign, the agents secured double-digit LOI’s from interested parties.

The Results

Through a strategic approach, the agents were able to identify a top real estate partner while also achieving above-market pricing metrics. Ultimately securing an aggressive cap rate in a yield-driven environment closing with a record setting price per square foot, maximizing the return on the real estate investment. The deal was executed on an all-cash basis with expedited due diligence and closing, providing the client with the liquidity desired to fuel the platform’s goals.

In the end, the sale leaseback not only met the client’s objective of unlocking liquidity but also provided stability through a long-term leaseback arrangement. The company will continue to maintain full control and continuity of operations in the facility. The successful transaction generated a 400% return, boasting a substantial arbitrage for the client and showcasing the value of leveraging a sale leaseback strategy in the right circumstances.