Sale-Leaseback: with a tax deferral option in the U.S. and Canada
Through a sale-leaseback transaction, automotive dealers sell their real estate to Capital Automotive and then lease it back. This unique arrangement allows dealers to tap into 100% of the equity in their real estate while maintaining long-term control of their property.
Dealers frequently use the capital received from transactions for acquisitions, operations expansion, and to fund new lines of business. Dealers also achieve the flexibility to pursue other personal goals such as estate planning, liquidity, or diversification. Additionally, the seller may defer capital gains taxes in the U.S. and Canada through our Operating Partnership Unit Program.
Capital Automotive has also become a viable alternative for many dealer groups considering selling their operations because dealers may maximize their proceeds by bifurcating the sale of their operations and real estate. By removing the need to purchase real estate, selling dealers can open the field of possible buyers tremendously because the cost of entry is significantly lowered which increases competition and increases blue sky value.
The following table compares and contrasts Capital Automotive’s sale-leaseback transaction with other alternatives available to dealers.
For more information on working with Capital Automotive, please contact our Business Development Team.