Free calculator · Real Estate
Sale-Leaseback vs. Refinancing
Compares a sale-leaseback against a mortgage refinancing side by side, calculating the implied financing rate, the tax on the embedded gain, and net after-tax proceeds from each route. Inputs are the sale price, annual leaseback rent, cost basis, depreciable basis and years held, the corporate tax rate, and the refinance LTV and mortgage rate.
By Devon Coombs, CPA, MBA · Teaching Professor of Finance, Santa Clara University · Reviewed August 2026
From the author: Devon Coombs, CPA, MBA teaches finance at Santa Clara University and works with corporate teams on practical AI.
AI training for finance teams · Consulting · The 10 Laws of Finance
Interactive Tool
Sale-Leaseback vs. Refinancing
Sale-leaseback
Refinancing alternative
Implied rate (rent ÷ price)
5.0%
≈ forgone owner yield
Tax on embedded gain
$1,373,077
21% × $6,538,462
Net after-tax proceeds
$28,626,923
sale − gain tax
Gain on sale
Accumulated depreciation (3 × $512,821)
$1,538,462
Adjusted basis (cost − accum. dep)
$23,461,538
Taxable gain (sale − adj. basis)
$6,538,462
Sale-leaseback vs. refinance
| Dimension | Sale-Leaseback | Refinance |
|---|---|---|
| Cash raised | $30,000,000 | $19,500,000 |
| Implied / stated rate | 5.0% | 6.50% |
| Residual value | Surrendered | Retained |
| Depreciation shield | Lost | Retained |
| Tax effect | Gain taxed now | No gain |
Learn the concept
This calculator comes from the free Real Estate Finance course, where the concept is taught with readings, worked examples, and practice questions.
When to use this measure
Embed this calculator on your site
Free to embed on any site; the widget includes an attribution link back to this page.
One useful finance email a week
A tool, a number worth knowing, and what it means for your money or your business. From Devon Coombs, CPA, MBA. No spam, unsubscribe anytime.
Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.