Make The Right Choice On Real Estate
Do you want to make smarter decisions about your business real estate? Wondering if you should sell the real estate with the business operation or hold onto the property and lease it to the new owner?
When selling your business we’ll help you maximize your profits with the right real estate decision.
As a business owner, one of the key decisions you will face when selling your company is deciding on the best approach for transferring ownership of the real estate it occupies. There are a few options to consider, including selling the business and the real estate together or selling the business and leasing the real estate back to the new owner.
Here are some key factors to consider when deciding whether to sell the real estate with the business or separate the two:
Property ownership structure:
The ownership structure of the real estate will be a key factor in determining the best approach. If you are the sole owner of the property, you have more flexibility in terms of what you can do with it. If the property is owned by multiple parties, you will need to consider the interests of all owners and come to an agreement on the best course of action.
Quality of geographic location:
The location of the real estate can also be a key factor in determining the best approach. If the property is in a highly desirable location, it may be more valuable to sell both the business and the real estate together. On the other hand, if the location is less favorable, it may be more beneficial to sell the business and lease the real estate back.
Cash flow generation:
The cash flow generated by the property is another key factor to consider. With the rental payments you receive during the term of the lease and any possible renewals, your property can generate steady passive income for years to come.
Lease Duration:
The length of the lease is another important factor to consider. If you have lease terms shorter than 10 years, the property value may be decreased due to the shorter duration lease. If you decide to sell the business and lease the real estate back, you will need to negotiate the terms of the lease, including the length of the lease and any provisions for renewals or future rent increases.
Situations when you might consider selling the real estate with the business operation …
The new business owner needs to own the property: If the new owner of the business is interested in purchasing the property, it may make sense to sell both the business and the real estate together. Leasing the property could affect their profitability and detrimentally impact the total sales value.
Multiple property owners: If the real estate is owned by multiple parties, you will need to consider the interests of all owners and come to an agreement on the best course of action.
Business has outgrown the space: If the business has outgrown the space it occupies and requires a larger location, it may make sense to sell the business and lease a new location.
Older building with issues: If the real estate is an older building that requires significant repairs or upgrades, it may be beneficial to sell the business rather than invest in improvements to the current property.
Ultimately, the decision of whether to sell the real estate with the business or separate the two will depend on your specific circumstances and the value of both the business and the real estate. It is important to carefully consider all of the factors at play and to seek the advice of a qualified professional before making a decision.
