Final answer:
A sale-leaseback allows property owners to free up capital for other investments by selling the property and then leasing it back. This transaction is different from refinancing, maintaining ownership, or avoiding transfer fees. It is similar to securitization, offering liquidity and risk management for banks. The correct answer is free capital for other investments.
Step-by-step explanation:
A sale-leaseback offers the property owner an opportunity to free capital for other investments. This type of arrangement allows the selling party to sell an asset and lease it back for a long-term, providing them immediate liquidity while retaining the use of the property. The process does not involve refinancing at a lower interest rate, retaining ownership over the property, or avoiding paying real estate transfer fees.
Securitization is a process that includes the pooling and selling of loans to create a financial security. This offers advantages such as the reduction of exposure to financial risks and liquidity of assets. Banks don't need to have significant extra funds to make a loan, as they plan to sell these loans and convert them into securities. Thus, a sale-leaseback transaction is a strategic financial move to unlock capital, similar to how securitization allows banks and other financial institutions to manage risk and liquidity.