$49M Exxon Deal a Rarity in Quiet Seal-Leaseback Market

By: Barbra Murray, Contributing Editor

A convenient method for property owners to secure a quick cash infusion, sale-leaseback transactions were plentiful just a couple of years ago, but now it is usually only the more financially burdened of sellers that resort to accepting lowball sale-leaseback offers. Whether White Oak Petroleum L.L.C. falls into the aforementioned category is unclear, but the Springfield, Va.-based company just sold 36 Exxon gasoline station and convenience store properties for $49 million in a sale-leaseback transaction with Jericho, N.Y.-based Getty Realty Corp.

The majority of the properties involved are located in Prince George’s Count, Md., a suburb of Washington, D.C.

The transaction was not the typical sale-leaseback deal; it was more of an acquisition-sale-leaseback deal involving three parties. In a simultaneous transaction, White Oak purchased the portfolio from ExxonMobil, and then immediately sold the properties to Getty and executed a 20-year triple net lease agreement with options for renewal.

Sale-leaseback transactions in the U.S. have declined considerably over the last two years. According to global real estate research firm Real Capital Analytics’ September U.S. Capital Trends report, in 2007, occupant-owners pocketed an aggregate $14 billion by relinquishing ownership of their homes in favor of leasing them. At that time, sale-leasebacks accounted for 30 percent of all single-tenant property sales. But what a difference a couple of years make. So far this year, single-tenant sale-leasebacks have totaled a paltry $1 billion, and represented only 10 percent of single-tenant property sales.