TCN Member Spotlight: Signature Associates - 3 Reasons Why Businesses Will Utilize Sale-Leasebacks To Battle COVID Cash Crunch


 TCN Member Spotlight: Signature Associates


3 Reasons Why Businesses Will Utilize Sale-Leasebacks To Battle COVID Cash Crunch

By: Luke Timmis, Director of Investment Division, Signature Associates Commercial Real Estate/TCN Worldwide in Detroit

As COVID-19 has thrown the world into uncharted territory, businesses across the globe are finding ways to create liquidity and fuel a comeback. Corporations with owned real estate, however, have a unique advantage to extract capital at above-market pricing for its properties by utilizing sale-leasebacks.

Below are three reasons why businesses are turning to the sale-leaseback to create liquidity and battle the COVID Cash Crunch:

1. Highly Competitive Sale-Leaseback Investor Market with Robust Pool of Sophisticated, Institutionally Capitalized Buyers.

Institutional real estate investors, specifically private/public REITs (Real Estate Investment Trusts), have displayed a voracious appetite for sale-leaseback transactions the last five years. Due to the intense competition for sale-leasebacks, all buyers participate with a high level of urgency, offers are presented without financing contingencies, and sellers are ensured a strong confidence of closure.

The Signature Associates Sale-Leaseback Team has been the leading platform nationally with $100 million of transactions closed in Q1 2020.

2. Liquidity in Three Months, Guaranteed; 90-Day Process from Marketing Launch to Closing Date.

The Signature Sale-Leaseback process includes marketing (5 weeks), purchase agreement negotiations (10-14 days), due diligence (30 days), and closing (10 days). The marketing period concludes with a highly competitive bid process generating anywhere from 5 to 20 offers from institutional real estate investors (primarily REITs).

Signature’s Sale-Leaseback Process has been streamlined to secure 90-day liquidity for businesses, utilizing practices and procedures from $1.2 billion of closed transactions nationally.

3. The Ultimate Recapitalization Tool for Preserving Equity and Avoiding Bank Debt.

Refinancing property is also a common practice when an infusion of capital is needed. However, there is a value discrepancy between sale-leasebacks and appraised value. The proceeds generated by a mortgage on the property would only amount to 50%-60% of appraised value, especially as lenders are more conservatively underwriting during the COVID crisis. Sale-leasebacks typically generate a premium to appraised value because the price is driven more by business financials than building quality/location valuation metrics utilized by appraisers.

The sale-leaseback provides liquidity from a hands-off real estate landlord instead of burdening the business with covenant-ridden bank debt.

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 In a Nutshell  

CRE Professionals: 137

TCN Member Since: 2018


  • Southfield
  • Detroit
  • East Lansing
  • Grand Rapids
  • Muskegon
  • Holland
  • Kalamazoo
  • Toledo


  • Brokerage
  • Tenant Representation
  • Investment Sales
  • Property Management
  • Maintenance Services
  • Advisory Services
  • Consulting
  • Market Research

Signature Associates Completed the #1 Ranked Deal within TCN Worldwide During the 2nd Quarter of 2020!

Congratulations to Joe Hamway and Greg Hudas at Signature Associates/TCN Worldwide in Detroit who completed the transaction with the highest total value, an Industrial Lease Valued at $54,853,560!

Did You Know?

In 2019, Signature Associates completed more than 1,032 transactions totaling 27.7 million square feet and 2,435 acres with a total value of $994 million.

Their Advisory and Management Services team performed comprehensive construction management projects totaling over $60 million and managed more than 8 million square feet of commercial space for their clients, making them the largest locally owned third-party property management firm in the market.


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