For some businesses it can be a wise decision and sell high buy low works the best. A business will gain capital to buy equipment, increase production or many other options to increase their profits by selling their property and leaseback plus there are some tax advantages.
With the state of Calif they are selling low and would have to buy high if they exercise the option to buy back. Besides that the article says that 2 studies reported that it would cost the state more money than they will receive in the long run and if a business did that say good bye. A lot depends on the cost of the leases compared to just having to maintain them and the leases will certainly be rising as the economy comes back. Sounds like the state would pay around 40 million more a year than it currently does owning them.
The 1.2 billion they hope to net isn't going to go very far.
Current Events » in reply to Sell-leaseback. Businesses do this all the time.
Re: Sell-leaseback.
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- California: kicking the can down the road