Restaurant Sale Leaseback

[Andrew Swan]

I'm acquainted with the owner of a regional, independent restaurant group (13 properties). He has solid operating numbers, and is looking to expand in the future. The first thing that comes to mind for me is a sale-leaseback transaction. Being relatively new to rei, and certainly new to a sale-leaseback situation, I'm looking for some advice on how to analyze a potential transaction.

The biggest positive for the lessee would likely be that it's a cheap(er) way to raise capital for expansion. What are some other specific advantages (tax, other financial, etc.)?

What are some drawbacks for both the lessee and lessor?

What are the key property-specific points for me to research and analyze for this potential transaction?

This is just a hypothetical at this point, but if early analysis makes sense I might bring the idea to him. Many thanks in advance for any thoughts on this transaction, and this transaction type in general.