Selling your building and staying put

How it works

You sell the building to an investor and, at the same time, sign a lease to stay on as the tenant. The buyer gets a property with a tenant already in place. You get the sale proceeds and a known rent.

When it makes sense

• You want cash for the business, to pay down debt or to buy out a partner.
• You plan to sell the business later, and a buyer would rather lease than buy the building.
• You want to separate your retirement savings from the business.

The lease sets the price

Because you’re both the seller and the tenant, the lease terms drive the price. A longer lease at a higher rent usually means a higher price, and higher costs for your business. I can show you how the two trade off, so you can choose the balance that suits you.

I know which terms will matter to you later: renewal options, the right to assign if you sell the business, and who pays for repairs.

Who buys these

Private investors and investment groups who like a long lease with an established tenant. They look closely at the strength of your business, because it pays the rent.

Questions people ask

Is a sale-leaseback a good idea?

It can be if you need the cash and you’re confident the space will suit you for the length of the lease. Talk to your accountant about the tax on the sale.

How long should the lease be?

Long enough to give a buyer confidence, often five to ten years or more, with renewal options for you.

Can I buy the building back later?

Only if the lease gives you that right, and many buyers won’t agree to it. Ask early.