MIAMI—Camille Renshaw knows a thing or two about sale-leasebacks. As the director and lead broker for Stan Johnson Company in New York City, she specializes in the disposition of single-tenant, net lease assets nationwide.  

Over the last 15 years, Renshaw has structured over $1 billion in investment sale transactions for mission critical assets as diverse as data centers, hospitals, distribution, and logistics facilities, emergency rooms, linen manufacturing plants, major retail banks, RND laboratories, and campus-style worldwide office headquarters. GlobeSt.com caught up with Renshaw to get her take on the sale-lease back market in part one of this exclusive two-part interview.

GlobeSt.com: Did strategies for sale-lease back change through the downturn? Are they changing in the recovery?

Renshaw: Sale-leaseback strategies vary with market cycle and corporate need. During the downturn and its recovery, we have seen many motivations for sale-leasebacks, including avoiding bankruptcy, avoiding foreclosure, expanding credit revolvers to take new business, expanding cash on hand in order to buy competitors, improving balance sheets in preparation for taking a company public, etcetera.  

The motivation depends on where a particular company is in the market cycle. The key factor is whether or not the underlying company books have a healthy future if a sale-leaseback is successfully executed. Obviously the odds of this being true are better during the recovery than during the decline. The key question is: what is projected EBITDAR? (Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs.)

GlobeSt.com: For corporations, is monetizing real estate through sale-leasebacks still a useful option? How can it unlock value? 

Renshaw: Typically, corporations lock up a great deal of equity in real estate at returns that don't match that of their core business. For example, a medical group might be getting 8% returns on their real estate, but achieving 40% returns on equity in their core business.

If the same medical group could access the equity in their real estate and reinvest it in their core business (by buying competing practices, investing in new modalities, expanding their physician/ client base, etcetera), their returns would dramatically increase.

GobeSt.com: When are sale-leasebacks the right option? What factors influence this tactic?

Renshaw: If a corporation's future is very promising—now that the recession is over, new business and new opportunities are ripe—and the corporation's EBITDAR is strong and growing, SLB is an option that should be analyzed if the corporation wishes to grow. The main factor is the corporation's trending EBITDAR over a three year period, including a future year.

Be sure to come back this afternoon to read part two of this interview. Renshaw will offer a prime example of how sale-leasebacks can unlock value.