A retailer can achieve some of the benefits of both owning and leasing a store through the use of a ________.
A) net lease
B) graduated lease
C) sale-leaseback
D) maintenance-increase-recoupment lease provision

Question

Quizplus · Accepted Answer

A sale-leaseback allows the retailer to sell the property they own and then immediately lease it back from the buyer. This provides the retailer with immediate cash from the sale while still allowing them to maintain control of the property through the lease. This allows the retailer to achieve some of the benefits of owning (control of the property) and leasing (cash flow from the sale) without the drawbacks of either. A net lease (A) is a lease in which the tenant is responsible for paying some or all of the property expenses, a graduated lease (B) is a lease in which the rent increases over time, and a maintenance-increase-recoupment lease provision (D) is a provision that allows the landlord to pass on increases in maintenance costs to the tenant. While these leases may be beneficial in certain situations, they do not provide the same benefits as a sale-leaseback in terms of owning and leasing a property.

A Retailer Can Achieve Some of the Benefits of Both