Strategic Asset Solutions has initiated its 360° Sale Leaseback Program, a comprehensive approach that provides companies with financial and real estate solutions that include ESG initiatives to lower energy costs and reduce CO² emissions.
The 360° Sale Leaseback creates a partnership between the seller / lessee and the buyer / lessor that creates value for both parties. As with a standard sale leaseback, the seller / lessee is able to monetize their real estate assets yet maintain operating control, and the buyer / lessee receives long-term stable cash flow. With a 360° Sale Leaseback, the seller / lessee partners with the buyer / lessor to have the buyer / lessor fund the cost of the ESG plan whilst sharing the cost saving of lower energy, water, waste and carbon emissions.
Basic Structure of 360° sale leaseback
Our Defined Process
Strategic Asset Solutions implements a defined process for our 360°Sale Leaseback Program. It is important for us to understand a company’s objectives for the sale leaseback transaction. In addition to financial, accounting and real estate goals, we also incorporate the company’s ESG targets in order to develop the most suitable deal structure including green lease terms.
| Quantify Company’s Objectives |
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• Financial & Accounting objectives • Real Estate objectives • ESG objectives |
| Review and Analyze Real Estate Assets |
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• Market Pricing • Market Lease Rents • Operating Costs • Capital Expenditure Requirements • ESG Options |
| Outline Proposed Deal Structure |
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• Purchase Price • Lease Terms (rent, length of lease, operational costs) • Lease Structure • Energy / Decarbonization Plan • Due Diligence & Closing Period |
| Documentation & Closing |
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• Purchase & Sale Agreement • Green Lease Agreement • Develop Net Zero Pathway into Asset Plan |
| ESG / Decarbonization Implementation |
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• Costs for ESG Plan funded by Buyer • Monitoring & Reporting • Sharing of ESG Cost Saving |
Green Lease
The lease will be structured in a manner that promotes alignment and full transparency between owner and tenant with green lease clauses, joint monitoring, shared data, and sharing of the costs savings.
The green lease will enable the tenant to improve their ESG performance through renewable energy access. Active data analysis to monitor real time performance of common and tenanted areas.
- The Lessor and Lessee shall share a common philosophy for maintaining and improving the property’s comfort and productivity from the perspective of energy saving, environmental considerations among others, and shall endeavor to collaborate with the measures that each implements with regards to this (including but not limited to the sharing of data, acquisition of environmental certifications, establishment of targets etc.)
- If the Lessee receives improvement effects and benefits such as a reduction of utility costs due to the investment made by the Lessor for energy efficiency retrofit of equipment, or if such improvement effects and benefits are expected to occur, the Lessor shall discuss with the Lessee the distribution of the improvement effects and benefits between both parties.
| Major Items | Green Lease Clauses |
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Owner-Tenant Engagement |
The lessor and lessee sharll collaborate to improve the environmental performance of the property. The lessor and lessee shall work to maintain and improve the comfort of the occupants of the property. |
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Sharing of Data |
The lessor and lessee agree to share the following data regarding the property. The lessor shall provide the lessee with the following data in the format that was separately agreed upon. The frequency of the lessor's provision of information shall not be less than 4 times a year. 1) Amount of consumption of electricity, gas and other fuels 2) Amount of CO2 emissions 3) Amount of water consumption 4) Amount of waste generated and their status of processing and recycling |
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Establishment of Reduction Targets |
The lessor and lessee shall establish reduction targets with regards to: 1) Amount of consumption of electricity, gas and other fuels 2) Amount of CO2 emissions 3) Amount of water consumption 4) Amount of waste generated and work together to achieve these targets |
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Energy Efficiency Retrofit(EER) |
The Lessee shall bear the expenses for the Green Lease(hereinafter the "green lease fees") as expenses other than for rent and common service fees. Green lease fees here refer to the expenses paid by the lessee to the lessor as compensation for the benefits that the lessee receives from the lessor's investment for energy efficiency retrofits. [Note: This fee represents the Lessor's share of the reduced energy costs.] |
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Maintenance and Improvement of Environmental Certifications |
The lessor and lessee shall establish a shared goal to acquire green building certifications, energy labels, etc. and shall collaborate in terms of sharing of necessary information. The lessor and lessee shall collaborate to aim to receive(maintain) an agreed ranking in one of the major building certifications. |
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Committee Meetings |
The lessor shall periodically hold meeting of "Committee for Environmental Consideration and Energy Efficiency", whether by itself or through the building management company, to share environmental information and improve environmental performance of the property. The lessee shall agree to partipate in the Committee meetings. |
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Environmental Considerations in Energy Efficiency Retrofit Work |
The lessor and lessee shall endeavor to reduce the amount of waste generated during energy efficiency retrofit works and to use materials that consider the environment and comfort of occupants. |