In a sale/lease back arrangement, who typically purchases the property?

In a sale/leaseback arrangement, the property is typically purchased by a financial institution. This structure allows the original owner of the property to sell it while simultaneously entering into a lease agreement, allowing them to continue using the property without owning it. Financial institutions, such as banks or real estate investment trusts (REITs), are often the parties that facilitate these transactions since they have the necessary capital and investment portfolios to handle such deals.

While private entities, governmental entities, and non-profit organizations can engage in real estate transactions, they are less commonly the typical buyers in a sale/leaseback arrangement specifically designed to provide liquidity to the seller while ensuring a steady stream of revenue for the buyer. The primary goal of these arrangements is to leverage capital efficiently, making financial institutions the most fitting purchasers.