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Corporations that are pushing owned real estate off their books are fueling a surge in sale-leaseback activity. According to Real Capital Analytics (RCA), a New York City-based research firm, corporate sales of single-tenant assets valued at $2.5 million or higher jumped 32.5 percent in 2017 to total $12.4 billion.
“While both public and private companies have been utilizing sale-leasebacks as a capital allocation tool for years, there has been an uptick in recent activity with a strong 2017 that's carried into 2018,” says Scott Merkle, a senior director at the Stan Johnson Co., a net lease brokerage, in New York City. Activity is being driven by a variety of factors, ranging from changes in corporate strategy as it relates to owning real estate to an incredibly attractive cap rate environment, he adds.