Owning the facilities that your company operates out of can be a great way to build value into your company. Real estate is a solid long term investment.
But, just because you have a successful business running out of your property, doesn’t mean that you have to keep it there or sell the two as a pair. Many buyers may not be able to afford the purchase of real estate and a business at the same time.
When that happens, you have several different options for what to do with the property after the sale of your business. Let’s explore some of the most common options.
Lease the Real Estate to the Buyer
If you want to keep making an income off your real estate, but are done managing the business, then you should consider keeping the property and leasing it to the new owner.
This can be a great way for you to create a new stream of income during your retirement. It’s a nice diverse investment for your portfolio.
You can always choose to sell the property down the line to whoever purchased your company. For now, you will have a guaranteed long term lease signed and ready to go.
Sell the Real Estate with the Company
If your buyer has enough capital, then you can consider selling them your real estate at the same time they purchase the company. Selling real estate concurrently is often a relatively straightforward transaction.
Buyers like to purchase the properties that their company operates out of so that they can increase their returns and decrease their risk with fewer management headaches and negotiations along the way.
Lease the Property with an Option for Purchase
If you don’t want to sell your real estate today, but it’s likely that you will want to sell down the line, then you can create a purchase agreement for your buyer.
This option often works well for buyers who don’t yet have enough capital to purchase real estate at the same time as a business. It’s also a great option for business buyers who aren’t certain they want to stay in the same location.
They can enjoy the consistency of staying in the location during the transition and then make the decision to purchase the property at a later date.
Sell the Property Separately as a Leased Investment
If the buyer of your business has no interest in owning real estate, you may want to consider selling the property to someone else as part of the separate deal. With a tenant already in the building long term, the investment is almost guaranteed.
Just make sure that you talk to your business buyer before selling the real estate to let them know that they will be dealing with a new owner once the property goes on the market.
Sell the Real Estate Unassociated
If your buyer doesn’t need the real estate for the company any longer, then you can always sell the property in an unassociated transaction. Depending on what kind of building it is, this could be more or less profitable than an associated sale.
For More Help Selling Real Estate Heavy Businesses
Having a lot of real estate associated with your business can drive up the purchase price and scare away potential buyers. But, there are always ways to restructure a deal to make it work for everyone.
As licensed business brokers, we at Dolan Sales can help you come up with a plan to sell your business and all of the properties associated with it. Contact us today for help.