Legal Definitions - leaseback

Definition: Leaseback is a term used to describe the sale of a property with an agreement that the seller can lease the property from the buyer immediately after the sale.

Example: A company sells its office building to an investor but continues to occupy the building by leasing it back from the new owner. This allows the company to free up capital while still maintaining use of the property.

Explanation: The example illustrates how a leaseback arrangement can benefit a company by providing them with immediate cash flow while still allowing them to continue operating from the same location. The investor benefits by acquiring a property with a reliable tenant already in place.