Free up capital without selling your building

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Plain-English definitions with BC sources, from the encyclopedia:

• Sale-leaseback for BC business owners (guide)
• Sale-leaseback
• Loan-to-value (LTV)
• Share sale
• Rent roll
• BC Financial Services Authority (BCFSA)

General information only. This page is not legal, tax, accounting or financial advice, and it isn’t an opinion on your situation. Laws, rates and figures change, and examples are illustrative. Get advice from a lawyer, accountant or other qualified professional before you act. Reading this page doesn’t create an agency or client relationship. Cam Appleton is a Commercial Real Estate Agent licensed by the BC Financial Services Authority (BCFSA RE611549) with Coldwell Banker Prestige Realty. Terms and disclaimer.

Refinance

A new or second mortgage. The lender takes the lower of loan-to-value × value and the loan your NOI supports at its debt coverage ratio. Higher rates shrink the income-based loan, so not all the equity on paper may be borrowable. Check the prepayment terms on your current mortgage first. See financing commercial property and the mortgage calculator.

Sale-leaseback

For owner-occupiers: sell the building and sign a lease to stay. You get the cash and give up ownership. See sale-leaseback.

Partial sale or partner

Sell a part interest, or sell one building and keep another. You may keep some upside, and you share control.

Before you pick a route

Compare after tax

What you keep matters more than the headline number. Model each option with your accountant.

A partial sale needs a structure

A share sale can keep leases and contracts in place and make a partial buy-in simpler, while an asset sale can leave the buyer less hidden risk. The choice changes tax and liability.

Vet a partner like a lender would

Before you sell a stake, check their finances and what they’ll put up.

Keep it simple

Complicated structures tend to fall apart. Fewer moving parts, more chance it closes.

A sale-leaseback is a financing tool

It turns equity into cash while you stay in the space, at the cost of becoming a tenant.

Get legal and tax advice before a sale-leaseback or partial sale. Mortgage advice is a BCFSA-regulated activity in BC.

Cam is a licensed real estate agent, not a lawyer or accountant, so take the legal and tax questions to them.

Compare after tax

Option	Cash	Control	Cost
Refinance	Limited by the lender’s tests	You keep it all	Interest and fees
Sale-leaseback	Most of the value	You become a tenant	Rent, selling costs and tax
Partial sale	Part of the value	Shared	Selling costs and tax on that part

In general a refinance isn’t a sale, while a sale may be taxable. Ask your accountant how this applies to you. Sell or hold has more.

An example: an owner-occupied warehouse in Delta

Say your company owns its warehouse outright and you want money to buy a competitor. A refinance keeps the building but adds a mortgage payment and lender reporting. A sale-leaseback turns the building into cash but makes you a tenant, with rent that usually steps up over time. Selling a share to a partner brings cash and someone with a say in decisions.

Run each one on the same sheet: cash in hand after costs and tax, yearly cost going forward and what control you give up. The best option depends on how long you need the space and what else you’d do with the money.

Common mistakes

• Comparing options before tax.
• Signing a sale-leaseback lease without the same care you’d give any other lease.
• Taking a partner without a written agreement on how either side can get out.
• Borrowing on a floating rate without testing what higher rates do to your cash flow.

Sale-leaseback: the lease sets the value

In a sale-leaseback you sell the building and stay as tenant. Buyers underwrite your rent and your credit as much as the bricks. If the rent is above what the business can sustain, the “equity takeout” is borrowed trouble.

Keep the lease plain: term, options, who pays which costs, and what happens on default. Goods and Services Tax and income tax results need your accountant before you choose this over a refinance.

It is a real tool for the right balance sheet. It is not free money.

Questions people ask

How much equity can I take out of a commercial building?

The lower of what the lender’s loan-to-value and debt coverage tests allow. Ask lenders for their current ratios.

What is a sale-leaseback?

You sell the building and lease it back, so the business stays put and you get the cash.

Does a refinance trigger tax?

Generally a refinance isn’t a sale, but tax depends on your situation. Ask your accountant.

Written by Cam Appleton, Commercial Real Estate Agent, Coldwell Banker Prestige Realty. Sources are linked in the text and were checked Oct 27, 2026.