Real Estate Leasing

Objectives

The objectives of the individual leasing parties are: 

• lessee
  • usage objective
  • optimising return on equity (ROE)
  • preserving liquidity
  • calculability
  • equity optimisation
    • indirect leasing (purchase leasing property from outside party)
      • no equity commitment
      • transfer of investment risk
    • direct leasing or sale and lease back (purchase leasing property from future lessee)
      • release of tied-up equity capital
      • realisation of hidden reserves
      • reduction of investment risk
  • possibly slow exit
• lessor
  • capital investment objective
  • potent long-term real estate user 

Motivation

• combination of lessee objectives (use of a property built to the operational specifications) and the lessor objectives (capital investment with stable long-term user)
• successor arrangement for divestment of the funds tied up in real estate

Function

• real estate usage with complete outside financing