Valuing A Sale & Leaseback Facility
My client is proposing a sale and leaseback facility to raise finance to recapitalise his business. The client will then buy back the building after 5 years.
I have monthly rentals and value of building now. How do i value the building? I have discounted the monthly rentals to come up with a value (more like a DCF) but haven’t considered the residual value - how do i incorporate that?
Are there better ways to value this?
What other financing alternatives exist considering that the sale and lease back facility may not be profitable for a potential investor.
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