Many companies in a rapid growth phase prefer not to finance real estate facilities through their own balance sheet. A sale-leaseback transaction through The Jenkins Organization, Inc. can be the answer. The Jenkins Organization, Inc. can arrange to purchase company owned real estate and then lease the property back to the client on a long-term basis. The client receives an instant infusion of capital with which to grow their core business or to pay down existing debt. The Jenkins Organization’s sale-leaseback program offers a number of benefits:

Speed - We can arrange and complete a sale-leaseback transaction quickly. We have immediate access to investment funds and handle the underwriting with our own professional staff.

Value – A sale-leaseback transaction through The Jenkins Organization, Inc. enables a company to raise the full value of its property, in contrast to the 50-80% usually provided by mortgage financing.

Cost - Substituting lease payments for depreciation and interest expenses may increase net earnings.

Off-Balance Sheet - Leases are generally structured so that they qualify as “operating leases” under the criteria set by the Financial Accounting Standards Board. Thus the lease obligation does not appear on the balance sheet.

Realizing Value - Although market values may have increased significantly, real estate assets are usually carried on the books at cost less depreciation. As a result, a sale-leaseback can unlock cash and improve the use of company assets.

Borrowing Capacity - Replacing an illiquid real estate asset with cash improves the company’s current ratio and liquidity, and makes it possible to pay down debt, improve coverage of debt, or increase borrowing capacity. Selling mortgaged property improves the company’s debt-to-equity ratio, making the company more attractive to banks and other lenders.

Special Circumstances - Companies sometimes need to erect a special purpose building designed to their own needs. We can arrange a sale-leaseback in the development stage. With the sale of the building guaranteed, 100% construction financing is available.

Acquisitions and LBO’s - A company planning to acquire another company can often arrange a sale-leaseback with The Jenkins Organization, Inc. as part of the overall transaction, using assets of the acquired company to reduce total acquisition cost. Similarly, management’s that plan to make acquisitions through a leveraged buyout can look to The Jenkins Organization, Inc. to design a sale-leaseback as part of the structure of the overall deal, thereby reducing the need for higher cost debt by lengthening the maturities of the overall financing.
Quality First - The Jenkins Organization’s development policies and quality control procedures will produce the highest quality development possible.
Cost savings - The Jenkins Organization’s low overhead and cost conscious approach will result in the lowest possible rent.