SAB Capital’s (“SAB”) Sale Leaseback (“SLB”) Capital Markets desk developed a bespoke database that identified $9.7 billion in SLB transaction value in 2025, representing a 27.6% YoY increase from 2024. SLBs established themselves as a mainstream asset class in 2025. Asset managers completed over $14B of M&A, purchasing net lease and SLB platforms to diversify existing credit strategies that offer comparable risk, but with the unique ability to capture depreciation. Bolstered by bonus clauses in the Big Beautiful Bill, enter, Depreciable Private Credit.
Looking ahead, broader commercial real estate transaction volume is projected to increase 15–20% in 2026, matching 2015 – 2019 averages. As market clarity improves, interest rates stabilize, and M&A activity accelerates, sale-leasebacks are expected to capture a larger share of this activity. For corporate clients, this creates an opportunity to unlock embedded real estate value and redeploy capital into growth initiatives, balance sheet optimization, or strategic acquisitions without disrupting operations. For a more detailed year in review and outlook for the year ahead, reference our attached deck here.
This is important for businesses that exist to make products, provide services, and/or administer care because unlike lenders that extend financing at 50%-75% of asset value, SLBs provide 100%-asset financing, extending incrementally more liquidity, often at lower financing costs, where lease (cap) rates tend to trade 150-300 basis points cheaper than borrowing rates.
Since landlords are not lenders or equity partners, SLBs also provide a flexible alternative for borrowers seeking growth and refinancing capital. Leases often do not require the personal guaranties, maintenance covenants, and dilution that come with lending and equity partners.
For operating companies evaluating refinancing, growth capital raises, and M&A, understanding how your tenancy or your acquisition targets’ tenancy is valued is a meaningful differentiator. If you’re interested in understanding how your tenancy is valued and how is can be used more effectively to accomplish the above initiatives, please reach out to our transaction professionals.
