Leaseback
Understand leaseback arrangements in Canadian real estate — what they are, how they work, and their benefits for buyers and sellers.
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
- Ground Lease
- Net Lease
- Operating Costs
- Commercial Lease
- Sale-Leaseback
An overview of Hedge Road Landing. (Alliance Homes)
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
Highlights from the Delta Golf & Country Club listing brochure. (Colliers)