The Hidden Reason Dealers Prefer Low-Demand Brands For Sale-Leaseback Gains

What has driven the rise in dealership sale lease backs? Let's just define what this even means. Can you give us the Spark notes definition? What is a sale lease back? Sale lease back is an alternative financing solution and it functions as a dead and equity substitute for businesses to make products and provide services. So mechanically, you're selling owned or controlled real estate and you're maintaining operational control of that real estate by leasing it back from by an investor for a long period of time. Most typically it's a 15 or 20 year lease where you're with several tenant options to extend. So you've got control over this real estate for a period of 40, 50 plus years in total. But given that real estate ownership is not core to most businesses, particularly dealerships, right? Owning the real estate is not core to selling cars. It's a great tool that extends a significant sum of capital. We'll get 100% to 150% plus LTV financing on real estate.

是什么推动了汽车经销商出售回租的增加？我们先来定义一下这到底是什么意思。能给我们简要说明一下吗？什么是出售回租？出售回租是一种替代融资解决方案，作为企业生产产品和提供服务的债务和股本替代方案。具体操作上，你将拥有或控制的不动产卖出，但通过长期租赁的方式从投资者那里租回，从而保持对该不动产的运营控制。通常情况下，这种租赁期为15到20年，有多个租户续租的选择，总体来说你可以控制这个地产40到50年以上。但考虑到大多数企业特别是汽车经销商，拥有不动产并不是他们业务的核心，对卖车来说，拥有不动产并不重要。这是一种很好的工具，可以筹集到大量资金，我们可以在不动产上获得100%到150%以上的贷款价值比融资。

Why are dealers looking to sell their real estate as a form of financing nowadays? Is it simply the fact that cap rates valuations went up and so there's more liquidity potential or is there other things I'm missing? What has changed that is really enticed dealers to at least explore this form of financing if they want to grow or whatever? Sure. I mean, one piece of it is, and I've heard so many people come on to your show and talk about the importance of scale and diversification within their, their dealership platform and being out there in active and acquiring other dealerships as they come up for sale is of great importance to a lot of dealers out there. So a lot of this M and A activity is important for fueling sale, lease back transactions because nature of the, the access to capital. We're talking 100% plus LTV financing on the real estate. You're financing a massive portion of the acquisition and you can stay liquid and maintain the ability to recycle capital and continue growing via acquisitions or development.

为什么经销商现在寻求通过出售房地产来融资？是不是仅仅因为资本化率估值上升，因此流动性增加，还是我遗漏了其他因素？究竟有哪些变化真正吸引经销商去探索这种融资方式，以促进他们的增长或其他目标？ 当然，原因之一是，我听到很多人说规模和多样化在他们的经销商平台中非常重要，并积极收购正在出售的其他经销商对许多经销商来说也是至关重要的。因此，这种并购活动对于推动售后回租交易非常重要，因为获取资本的性质。我们在谈论的是超过100%贷款与价值比的房地产融资。你正在融资收购中的大部分资金，并且能够保持流动性，同时拥有重新分配资本的能力，通过并购或开发继续增长。

Are there any specific areas that you're seeing more appreciation? Do we are we expecting that at Toyota stores like super safe and secure? And so you're just going to pay more for that. Give us a little bit more behind the scenes of kind of your thought process. I'll break this out into geography and I'll break this out into brand, right? So if you're looking at Toyota relative to Stellantis right now, dealers are going to be much more excited about an acquisition opportunity that flies a Toyota flag than a Stellantis flag. Personally, I'm seeing a lot more dealer acquisitions that are of Stellantis points rather than Toyota and the Toyota ones are going to transact a lot quicker and at a greater blue sky multiple.

你有没有看到哪些特定地区的价值增长更显著？我们是否预计丰田店会像超级安全和可靠那样受到更多关注？那么你就得为此支付更多费用。请给我们讲讲你们的思考过程。 我会把这个问题按照地理位置和品牌两个方面来拆解。就现状来说，如果你比较丰田和Stellantis， 经销商对飞扬着丰田旗帜的收购机会会更加兴奋，而不是Stellantis。 就我个人观察，目前有更多的收购与Stellantis有关，而丰田的交易会更快完成，并且会有更高的蓝天倍数（blue sky multiple）。

If that multiple for the enterprise acquisition is greater, it is less additive relatively for that dealer to execute a sale. But if you're paying eight times blue sky for a Toyota dealership and we're simultaneously executing on a sale lease back for the real estate at 13 to 15, 16 times that delta is less significant. Whereas if this is a Stellantis dealership and you're able to acquire the enterprise at maybe it's three to four time turnings and we're executing on that same sale lease back at 12 to 15 times red multiples, then it is financing that multiple arbitrage that exists is so far so much greater. So you're saying that the dealers are benefiting more from the less sought after brands because they're just simply getting a bigger spread on what they're paying versus what you would be paying. Is that correct?

如果企业收购的倍数较高，那么对于经销商而言，执行销售的附加值相对较低。但如果你为一个丰田经销商支付八倍的无形资产倍数，并且我们同时以13到15或16倍的倍数进行房地产售后回租，那么这个差额就不那么显著。而如果这是一个Stellantis经销商，你能够以三到四倍的企业倍数进行收购，同时我们在同样的售后回租中按12到15倍的红色倍数执行，那么这个融资套利就大得多。所以你的意思是，经销商从那些不太受欢迎的品牌中获益更多，因为他们支付的金额和你支付的金额之间的差距更大。是这样吗？

Yeah. And like you said, we should take a step back for a quick second and just say, add SAB, it's not our own balance sheet that we're buying this real estate off of and we're not acquiring it ourselves. We're acting in a brokerage capacity and acting as a fiduciary and an advisor to auto dealers that are executing on these transactions. So wouldn't be us directly that are making these acquisitions?

对，就像你说的，我们应该稍微退一步，再解释一下。关于SAB，我们并不是用自己的资产负债表来购买这些房地产，也不是我们自己在收购这些资产。我们是在以经纪公司的身份行事，为进行这些交易的汽车经销商提供受托人和顾问的服务。所以，进行这些收购的并不是我们直接在操作。

But I think if we look at it from the lens of that multiple arbitrage again, I think it is significantly that just that delta that exists between four times blue in 13, 14 times rent is greater than eight times versus the same red multiple. And even if we take that down to a more compressed cap rate or a more significant rent multiple, that delta is still less significant for a Toyota brand. But it all depends on what is most important to the dealer involved in the transaction. And that's the way we start off every conversation. What is most important to you? Is it limiting cost of capital in this transaction? Is it limiting red load over the span of the lease? Is it getting the greatest proceeds figure? What that's going to do is going to impact cost of capital more than anything else. Do you find it off to value these properties, right? The deal for real estate is so core to the operation. And clearly you're in the business of selling cars. The real estate is just bricks. How big is that spread across different regions when it comes to the actual valuation of the real estate? Yeah. So part of that process is qualitative and part of that process is quantitative. Quantitatively, we want to understand what market rent looks like in that geography is this rent affordable for the dealer. We want to understand what the average cap rate of commercial properties transacted in that geography are.

但是我认为如果我们再次从多重套利的角度来看，我认为仅仅是存在于四倍蓝色和十三、十四倍租金之间的那个增量，就已经比同样的红色倍数间的差异大得多。即使我们将其压缩到一个更低的资本化率或更高的租金倍数，对于丰田品牌来说，这个增量仍然较小。但这最终取决于参与交易的经销商认为最重要的是什么。这也是我们每次对话的开始：对你来说，最重要的是什么？是减少此次交易的资本成本吗？是减少租赁期间的红色负载吗？是获取最高的收益吗？这些因素中的任何一个都将对资本成本产生最显著的影响。 你觉得评估这些物业有困难吗？因为房地产交易对整个运营非常核心，而你们显然是卖车的生意。房地产只是砖头。在不同地区，房地产的实际估值差异有多大？ 评估过程的一部分是定性的，另一部分是定量的。定量方面，我们希望了解该地区的市场租金是什么样子的，这个租金对经销商是否负担得起。我们还想了解在那个地区进行交易的商业物业的平均资本化率。

And then the other piece of it, when you talk about this evaluation as a whole, is how profitable is the dealership? So that's a big piece of the quantitative part of the analysis. But the other piece is like qualitatively, what brain does this dealership? Again, like we talked about a difference right now in perception and performance between Toyota and Stellantis that you're going to see wash out in cost of capital represented as cap rate. So you're likely to see a more compressed cap rate. In an apples to apples comparison, all else remains equal. You're likely to see a more compressed cap rate for a Toyota dealership relative to a Stellantis dealership. So I'm going to put my dealer hat on and say, if I met you, I think the first question I've tried to figure out right away is, does this hurt my brand value? So if I sell my bricks today and then five years later, I decide I want to sell it to business, the enterprise, I have to imagine that you've studied that or look back at prior results or anything. Can you just shed a little light on that side of the world and how selling the real estate impacts the dealership's value long term?

然后，谈到整体评估的另一个方面，就是这家经销店有多盈利。这是定量分析中的一个重要部分。但另一个方面是定性分析，比如这家经销店的品牌实力。就像我们之前讨论过的，目前人们对丰田和Stellantis的认知和表现存在差异，这会反映在资本成本上，也就是资本化率(cap rate)。因此，你可能会看到丰田经销店的资本化率更低一些。在所有其他条件相同的情况下，相对比Stellantis经销店，丰田经销店的资本化率可能会更低一些。 所以，作为经销商，我会想，如果我要见你，第一个问题可能就是，这会损害我的品牌价值吗？如果我今天卖掉我的地产，并且五年后我决定要出售整个业务，你一定研究过或者回顾过之前的结果，对吧？你能不能解释一下这个问题，谈谈出售地产对经销店长期价值的影响？

If you look at dealership buy, sell transactions, right? You're you're buying goodwill and you're buying the real estate. Most typically, that's the most comment, right? And real estate is obviously a significant portion of the total valuation or compensation in that transaction. So if you are selling the real estate in a sale, at least back transaction today, you have the immediate access to that capital to be able to reinvest it into that business. Maybe it's growing in buying another point nearby or maybe it's reinvesting that capital back into the business and seeing her in improvement and performance in the short term. So that when you go and you're selling that the enterprise later on, assuming there's improved performance there, the blue sky multiple on a greater figure is going to yield a greater proceeds figure and just know that you've already cashed out on the real estate, but you've benefited from reinvesting that into the business.

如果你看看汽车经销商的买卖交易，对吧？你实际上是在购买商誉和房地产。通常情况下，这最为常见。而房地产显然是交易总估值或补偿中的重要部分。所以，如果你今天在进行售后回租交易中出售房地产，那你就可以立即获得这笔资金，将其重新投资到业务中。或许你会用这些资金在附近购买另一个点，或者将资金重新投资到现有业务中，短期内看到业绩提升。这样，当你以后出售企业时，如果业绩有所改善，更高的估值倍数将会带来更高的收益。而且，你已经通过出售房地产获取了资金，但同时你也从将资金重新投资到业务中受益。

So you're basically saying that during a sale of the business, these two pieces are anyways segregated, the real estate and the business, which is true. And so it's sort of just it's mutually exclusive opportunities. And this is just one way to take advantage of the real estate without selling your actual operating business. One important piece of that in that transaction, where you tied the sale of the business to the sale of the real estate to the same acquiring business owner, you're most typically going to value the real estate at the praised value. And that appraised value is going to be tied to the utility value of that real estate for that dealer and some function of local market cops for vacant and utility value real estate. Right.

所以你基本上是在说，在出售企业时，这两部分——房地产和业务——是会被分开的，这确实是事实。因此，它们是相互排斥的机会。这只是利用房地产，而不出售你实际运营的业务的一种方式。在这次交易中，有一个重要的部分，就是你将企业的销售与房地产销售捆绑给同一个买家时，通常会按评估价值对房地产进行估价。而这一评估价值会与该房地产对该买家的实用价值以及当地市场上空置和实用价值房地产的一些因素挂钩。明白了吗？

But if you execute a sale lease back, when I say you're getting a hundred percent plus LTV for that real estate, that might be as high as a hundred and fifty percent LTV. That's of appraised value. So you're getting a greater proceeds payout from the real estate via sale lease back because now you're valuing it based off of the income stream for rent.

但是，如果你进行售后回租，当我说你获得的贷款价值比（LTV）超过百分之百时，这个比例可能高达百分之一百五十。这是基于评估价值的。所以，通过售后回租，你从房产中获得的收益支付会更高，因为现在你是根据租金收入来对其进行估值的。