Re: your reaction to lease back. I am posting here as others probably not interested.
I ran away from some lease backs like Red Lobster. It cost like 5 million and I would get 5.65 interest ( eye rolling to ignore the overpaying) in Northern Fla. for leasing out for 30 years with all the options they have, they would pay a 5% increase every 5 years...........but I realized that property was only worth 3 million on this triple net lease for Red Lobster......So I was overpaying for the property and if they went BK I would be out 2 million. Red Lobster was assured a stable leasing for 30 years,
and I considered myself a sucker if I signed the contract, as many buyers do not do that kind of DD..
At the time I thought interest rates would be lower, the 10 year was close to 2%, went down as low as 1.37% since, now about 1.55%... But I was not buying property, I was buying a bond dressed up like a Red Lobster.
So if a Co. sells their property for a premium and can lease it back for eons at almost same rent, it can be a great idea as a Co is assuring itself a stable lease while pumping needed cash into their working capital.
Now with the interest rate thing going for so long against consensus, I would have been ok ( if I bought the overpriced property), just as I would if I bought any historically low interest bond then, as I could unload the property now to another sucker, further sweetened by our current extreme low interest rate environment....... but that is like a pumper of a POS stock surprised later after he sold, his crap had unforeseen value.
