Tenet Advantage

Solutions designed to
maximize proceeds

If you are going to borrow against or sell your real estate, optimize your proceeds. The capital freed up can be reinvested into your business, raising shareholder returns and making your company more valuable.

Solutions designed to
lower your overall cost of capital

Consider an example. When it comes to real estate ownership – typical traditional financing tends to range from 60% to 70% of real estate value, resulting in an equity contribution of 30 to 40% of value. The cost of capital will be the weighted cost of the borrowings and equity you use. With real estate leasing, there is typically no equity requirement, which means that the cost of real estate capital is simply the cost of the lease. In nearly all cases, the cost of lease capital will be far less than the cost of ownership capital, which means your return on equity and corporate valuation will be greater.

Solutions designed to
minimize your payment constant

We structure transactions thoughtfully – considering the trade-off between (i) maximizing our customers’ use of both lease and borrowing proceeds and (ii) keeping payment requirements low to maintain a suitable margin for operating error. Higher corporate leverage does not always mean higher corporate risk. Risk comes with financing decisions providing little margin for error.​
Comparing your lender principal and interest payments to your loan proceeds is called your borrowing constant. But with a lease, the payment constant will be the lowest available. That’s because landlords don’t expect to be paid back for their real estate investment, whereas lenders do. Lower constants and a lower equity mix mean higher investor returns, together with desirable margins for error.

Solutions designed to
minimize adverse tax impacts

Financing decisions can have meaningful tax implications. You want to maximize after-tax proceeds and minimize your effective after-tax payment constant. Our solutions are designed to help you achieve that. One benefit of real estate ownership is the ability to depreciate those assets. But, while depreciation helps lower taxes in the near term, it’s just a deferral. Owning depreciated real estate can make it harder to sell property later and often drives owners to seek costly and illiquid real estate strategies to maintain their tax deferrals. Meanwhile, with lease constants fully deductible, lease tax shields offer similar benefits without the overhang of an eventual depreciation recapture expense.

Solutions designed to
maximize your operational flexibility

Focus on long-term value creation and never forget opportunity costs. The hidden costs of inflexibility can be significant, dwarfing other capital costs.
Consider the following:
- Is your financial solution not assumable?
- Is there potential for a large prepayment penalty?
- Will your capital provider enable future proceeds to improve assets you financed with them?
- Will your capital provider work with you to dispose of unwanted assets you financed with them?

Solutions designed to
accelerate your growth

We help our customers unlock dynamic growth capital without equity dilution. Not having to part with the equity needed for traditional real estate financing does more than simply elevate your return on equity.  It frees up valuable equity to seed added growth.  The wealth created by your businesses is a function of your current equity returns plus the growth rate of your cash flow.  Our real estate lease capital is used to increase both your current returns and long-term growth, driving expanded wealth creation.