What characterizes a leaseback arrangement?

A leaseback arrangement is characterized by the seller leasing the property from the buyer after selling it. This structure allows the seller to maintain operational control of the property while freeing up capital from the sale. It can be particularly beneficial for businesses that need liquidity but want to continue using the property for their operations.

In this arrangement, the seller effectively becomes a tenant of the property they just sold, often resulting in a smooth transition with the seller retaining occupation while the buyer receives rental income. This can also be advantageous for the buyer, as it provides immediate rental income while minimizing the risks associated with investing in a property that would otherwise be vacant.

Other options present different scenarios that do not accurately capture what a leaseback entails. For instance, a buyer renting from the seller or the property remaining vacant do not reflect the essence of a leaseback, as these arrangements lack the critical elements of a simultaneous sale and leaseback agreement. A temporary transfer of ownership without leasing also deviates from the fundamental nature of a leaseback, which inherently involves both selling and leasing the property back to the seller.