MIAMI—To monetize or not to monetize? That's the question formany corporate real estate owners assessing their situations in arecovering economy. That said, sale-leasebackscontinue to be a popular strategy.

| caught up with Ankur Gupta,corporate advisory partner in the Chicago Office ofMcDermott Will & Emery and a member of thefirm's real estate group, to get his thoughts on howsale-leasebacks can unlock value in part one ofthis two-part exclusive interview. Be sure to check back thisafternoon for part two, in which Gupta will discuss whensale-leasebacks are the best option.

| Did strategies for sale-lease backchange through the downturn? Are they changing in the recovery?


Gupta: The fundamental strategies forsale-leasebacks remain unchanged despite the upsand downs in the real estate markets in the recent past. But savvyplayers are fine-tuning those strategies in the current recovery togain an edge over the competition to help them offer the mostattractive terms for a given transaction.

| For corporations, is monetizing realestate through sale-leasebacks still a useful option? How can itunlock value?


Gupta: Monetizing their real estate throughsale-leasebacks remains a viable and, in manycases, attractive option for companies whose primary business isoutside of the field of real estate. Companies that sell goods orservices frequently lack in-house real estate expertise and, as aresult, fail to maximize the value of their owned real estateassets. Often times when examining their various alternatives withexpert assistance, companies conclude that monetizing their ownedreal estate assets provides them with a cost-effective and low-risksource of liquidity compared to available corporate creditfacilities, a bond issuance or a conventional mortgagere-financing.

| Can you give me an example of how asale-lease back unlocked value for a corporate real estate owner?


Gupta: Upon examining their variousalternatives, a service-based company concluded that monetizingtheir national portfolio of owned industrial realestate assets would provide them with a cost-effective andlow risk source of liquidity compared to their available corporatecredit facility, a bond issuance or a conventional mortgagere-financing. The company proceeded to enter into a portfoliosale-leaseback with an industrial real estateinvestment trust, structuring their leases to provide themappropriate flexibility in light of their projected long- andshort-term growth, cash flow needs and geographic expansion,contraction or diversification.


The company obtained approximately $100 million of workingcapital proceeds from the transaction which they subsequently usedto fund a sizeable corporate acquisition and modernize theirexisting operations. Absent the portfoliosale-leaseback, the company would have been unableto fund the corporate acquisition due to insufficient equityrequired to consummate the transaction and would not have been ableto cost-effectively and simultaneously modernize their existingoperations.

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