Selling up and staying on

What do fridges and real estate have in common? Well, quite a lot if you listen to WP Carey, one of the pioneers of the sale and leaseback transaction. Before setting out on a successful career in financing Bill Carey, the original founder of the US based financing firm, used to purchase refrigerators. His reasoning was simple. Students need fridges but such a machine represents a large outlay for a box that is not particularly portable once your university career comes to an end, so instead of buying one why not lease? In this way, Bill Carey secured himself an income while at university. “Later he moved into investment banking and he began to think that this concept of sale-leaseback would work very well in real estate as a way for companies to release the capital they have tied up in their real estate and then more effectively deploy it into their operations so he quit his job and set up W. P. Carey with his first fund in 1973,” explains Arvi Luoma, the managing directo