While retailers like Big Lots, which completed a $725 million sale leaseback of four distribution centers, are making headlines with sale/leaseback activity, companies in other sectors are also eyeing such transactions.

"It [the interest in sale/leasebacks] is across industries," says Jeff Berryhill, principal at Stonemont Financial Group. "I think retailers tend to be a little bit more visible because they're doing some of the bigger transactions that have been announced."

Of course, part of the reason retailers are making headlines is because COVID-19 put their businesses in peril.

"Retail is tough right now," Berryhill says. "Industrial is probably the asset class that's going to be the most resilient, through COVID. Given that we see an acceleration in the adoption of e-commerce, we're going to need more distribution space, particularly if we see people continue to shop online and buy groceries online."

As a company decides to divest assets in a sale/leaseback scenario, Berryhill says it first needs to consider what properties are mission-critical.

Berryhill says it's "essential" also to do a lease analysis.

"It [mission critical] is maybe an overused term in our business, but it's important because it indicates the assets that are going to be committed to long-term," he says.

If the seller, which is also the tenant, plans a long-term stay in the property, the pricing will be better.

"You can certainly sell assets with shorter-term leases or with no lease in place, but that net cost to capital is going to be more expensive," Berryhill says.

Deciding what to do with the proceeds of the disposition may be an even bigger question than choosing what to sell.

"The use of proceeds is important for a company when it thinks about selling a property," Berryhill says. "It doesn't make sense traditionally for a company to make a sale/leaseback and then just sit on the capital that is raised. If there's a motivation to either repay debt, buy other companies or invest in technology or investing people, those are important factors to consider."

As COVID-19 stretches balance sheets thin, Berryhill thinks that sale leaseback activity will increase.

"I do think we will see a sustained increase in this type of transaction activity," Berryhill says. "It will certainly be a focus while we are sequestered. The traditional capital markets are not normal."

Berryhill says these times of economic turbulence "tend to create changes in behavior."

"I think it gets back to making smart decisions around capital allocation, not having a bloated balance sheet and making sure that you've got dry powder to accomplish other strategic objectives when they present themselves," Berryhill says. "So I think we'll see more of this type of activity."