In a sale-leaseback scenario, what happens to the property?

In a sale-leaseback scenario, the owner of the property sells the property to another party and then immediately leases it back from the buyer. This arrangement allows the original owner to retain the use of the property while receiving an influx of capital from the sale. Sale-leaseback transactions are common in commercial real estate, as they can provide the seller with liquidity and allow them to continue operating their business without interruption, all while transferring the ownership interest to the buyer.

The structure of this arrangement is particularly advantageous for businesses that may need capital for expansion or other investments but do not want to give up control of their operational facilities. The seller becomes a tenant, leasing the property back under a long-term lease agreement, which ensures stability in their operations while freeing up cash from the property asset.

The other options do not accurately describe a sale-leaseback arrangement. Keeping ownership while leasing part of it does not involve selling any portion of the property, and leasing it out to a new tenant suggests a different ownership structure altogether. Giving up all rights to the property would not allow the seller to maintain occupancy or control through a lease arrangement after the sale.