After three years of elevated rates and frozen balance sheets, corporate real estate teams are finally exhaling. The Federal Reserve is guiding the funds rate toward 3% by the end of 2026, the ECB has cut its deposit facility to 2%, and private equity dry powder sits at roughly $2.5 trillion globally, with close to $500 billion allocated specifically to real estate. In this environment, sale leasebacks have moved from the back burner to the center of the strategic playbook. Owners are monetizing appreciated real estate at cap rates of 7–9% (11x–14x multiples), redeploying the proceeds into growth while keeping full operational control. Investors, searching for yield in a lower-rate world, are competing aggressively for long-dated, triple-net cash flows backed by investment-grade credits.
The arithmetic is straightforward and compelling. Senior debt is trending toward 4–5%, yet sale leasebacks routinely deliver proceeds well above traditional loan-to-value limits. Lease payments remain tax-deductible, covenants are minimal, and the balance sheet shifts from fixed assets to operating leases, often improving debt ratios and credit metrics overnight.
The buyer universe has broadened dramatically. Net-lease REITs are now joined by life insurers, sovereign funds, pension plans, and family offices, driving competition that compresses cap rates on credit tenants and lifts pricing on solid secondary assets.
What’s Driving the Wave
U.S. GDP forecasts for 2026 cluster around 1.8–2.0%, eurozone growth is projected at 1.0–1.3%, and recession fears have receded from their peak. Management teams are comfortable locking in long-term occupancy at today’s rents.
U.S. net-lease investment volume is already up 27% year-to-date through mid-2025, and global commercial real estate investment recorded its first year-over-year increase since mid-2022. Ten-year Treasuries hovering near 4% make unlevered yields of 6–8% from investment-grade sale leasebacks look highly attractive.
Many of the largest 2025 transactions never hit the open market, and the off-market pipeline continues to grow.
Where the Action Is
- Industrial and cold-storage portfolios, including IOS
- Corporate headquarters and distribution campuses
- Single-tenant retail and quick-service restaurants
- Medical office and outpatient centers
- Grocery-anchored and convenience assets in Europe and the Sun Belt
Recent Momentum
- Scholastic closed $401 million in net proceeds from the sale leaseback of its New York headquarters and Missouri distribution center in December 2025.
- Asda completed a £568 million ($742 million) sale leaseback of 24 stores and one depot across the UK in November 2025.
Both transactions provided immediate liquidity for operational upgrades and shareholder initiatives while preserving day-to-day control.
Looking Ahead
The macro backdrop, easing policy rates, stable growth, and nearly half a trillion dollars of CRE-focused dry powder, rarely lines up this cleanly. For owners with appreciated real estate, 2026 presents an ideal window to extract equity on favorable terms. For investors, it offers the chance to secure long-term cash flows before yields compress further.
Sale leasebacks are no longer just a refinancing tool. They have become one of the most efficient bridges between today’s embedded real estate value and tomorrow’s corporate priorities. The table is set, and 2026 is poised to deliver.
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