What is the primary purpose of a land sale leaseback?

The primary purpose of a land sale leaseback is to sell property and then lease it back. This financial arrangement allows a seller to free up capital while retaining the use of the property. By selling the property, the seller receives a lump sum of cash, which can be utilized for various business needs, such as debt repayment or funding operational expenses. Subsequently, they enter into a lease agreement to continue using the property, effectively transforming a real estate asset into liquid cash while maintaining occupancy.

This strategy is often leveraged by businesses seeking to improve their cash flow without losing access to essential facilities, enabling them to invest in other areas of the business or reduce financial leverage.