Selling a business can be challenging, especially when commercial real estate is involved. In New York, it’s common for a company to own the building or property where it operates. This can complicate the sale of the business as it now involves selling both the operating business and the commercial real estate. However, it is possible to sell both together.
Determining the value
When it comes to selling an operating business and commercial real estate, the first step is to determine the value of each component. This is because the determining value of the business is usually its earnings. In contrast, the determination of the value of commercial real estate is market value. Therefore, it’s essential to understand the value of each component to ensure that both are selling at fair market value.
One of the critical factors to consider when selling an operating business and commercial real estate together is to ensure that the buyer has the necessary financial resources to purchase both components. It is not uncommon for buyers to only have the means to purchase one component, so it’s crucial to understand the buyer’s financial capabilities before proceeding with the sale.
Transfer of ownership
Another aspect is the transfer of ownership for both components. Have an explicit agreement that outlines the terms and conditions of the sale, including the transfer of ownership for both the business and the real estate. Be clear on the responsibilities and obligations of each party involved in the deal to have a better chance at a smooth and seamless transfer of ownership.
Approaching the sale with a plan
Approach the sale of an operating business and commercial real estate with a well-thought-out plan and a thorough understanding of the process. Proper due diligence and a clear agreement can ensure a smooth transfer of ownership and minimize the risk of unexpected complications. In addition, it may be beneficial to consider the long-term impact of the sale, both on the business and the commercial real estate, and to ensure that the sale aligns with the goals and objectives of all parties involved.