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by Mike Myatt
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ny of the corporate real estate programs today offer fixed rent structures providing full inflation protection. Because the key value determinant of credit tenant property is the long-term corporate guarantee, this asset does not experience the cycles affecting other real estate markets. Long-term, highly leverage financing removes interest rate risk and minimizes pricing volatility. Circumstances affecting traditional real estate, such as changes to surrounding property, local politics and market swings have little impact on credit tenant property values.
Liquidity: The long-term corporate guarantee of rental income and expense coverage combined with the tenant-based financing enable corporate real estate assets to be traded with exceptional liquidity not typically associated with real property. Most lenders will allow businesses to convert existing fixed real estate assets into cash at fair market value at what may be a premium over book value. Funding can also be used for new construction including the cost of the land acquisition. Proper use of corporate real estate as a financing tool will eliminate the need for a business to tie up capital or credit in land or buildings.
A wide variety of sale leaseback structures are available from lenders who have a practice area dedicated to
corporate real estate finance. When developing your capital formation strategy make sure you evaluate corporate real estate assets as a viable vehicle for accomplishing your goals.
Visit http://www.pacificsecuritycapital. |
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