Leaseback

Understand leaseback arrangements in Canadian real estate — what they are, how they work, and their benefits for buyers and sellers.

Leaseback

August 08, 2025


What is a Leaseback?

A leaseback is a financial arrangement where a property owner sells the property and then leases it back from the buyer, continuing to occupy it.

Why Leasebacks Matter in Real Estate

In Canadian real estate, leasebacks can free up capital for sellers while providing stable rental income for buyers.



Key points:
  • Often used by businesses seeking to improve liquidity
  • Allows seller to maintain property use without ownership
  • Typically involves long-term lease agreements



Understanding leasebacks helps both parties structure mutually beneficial deals.

Example of a Leaseback in Action

The corporation sold its headquarters in a leaseback arrangement, gaining capital while remaining in the building as a tenant.

Key Takeaways

  • Seller becomes tenant after selling property
  • Frees up capital while maintaining use of property
  • Provides stable income for buyer
  • Requires clear long-term lease terms
  • Common for commercial and industrial properties

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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