How to Sell a Business That Includes Real Estate in Northeast Florida
Short answer: When you own the building, you are selling two assets, and buyers may want the business, the property, or both. Value them separately: the business on its earnings, adjusted for a fair market rent if you pay yourself little or none, and the real estate on comparable sales and market rents, often with an appraisal. Some owners sell the business and lease the building to the buyer, which creates income for them and means the buyer finances less, though a lender’s requirements and your tax situation decide whether it fits.
Some of the businesses I represent in Northeast Florida come with the building they operate in, and that changes the sale in important ways. When you own both the company and the real estate, you are really selling two assets, and how you handle them can have a big impact on your total proceeds, your taxes, and how easy the deal is to finance. Here is how I help owners in St. Augustine and Jacksonville think it through.
You have two assets, and two ways to sell them
The business and the property are separate things, and buyers may want one, the other, or both. Some buyers want to own everything so they control their location. Others prefer to buy the business and lease the building from you, which turns your real estate into an income stream after the sale. Deciding which path fits your goals is one of the first conversations to have, because it shapes how I price and market the opportunity.
Value each one on its own terms
A common mistake is to lump the business and the building into one number. They are valued in completely different ways. The business is valued on its earnings, usually a multiple of seller’s discretionary earnings or EBITDA. The real estate is valued on comparable property sales and market rents, often with a professional appraisal. Separating the two gives buyers a clear picture and usually leads to a stronger overall price. If you want a starting point on the business side, my free valuation calculator is a good first step.
Watch the rent assumption
If you own your building, you may be paying yourself little or no rent, which makes your profit look higher than it would for a buyer who has to pay market rent. When I recast your financials, I adjust for a fair market rent so the business earnings reflect reality. This matters whether the buyer purchases the property or leases it, and getting it right protects your credibility during due diligence.
Keeping the building can be a smart move
Plenty of owners sell the business and hold the real estate, then lease it back to the new owner on a long-term lease. Done well, this gives you steady retirement income and a hard asset, while making the business easier for a buyer to afford because they are financing less. It is not right for everyone, but it is worth putting on the table. A lender’s requirements and your own tax situation will help decide.
Selling the building along with the business? Only the real estate can qualify for a 1031 exchange, and my guide to 1031 exchanges in a Florida business sale explains how to separate it and allocate the price.
Structure it the right way
Selling a business with real estate has more moving parts than a straight business sale, but those parts also create opportunities to improve your outcome. I can help you weigh selling both, leasing the building, or a mix, and structure the deal around what you actually want. The first conversation is free and completely confidential. Call me at (904) 789-1276 (Truforte Business Group) or reach out here.
Disclaimer: This article is general information, not legal, tax, accounting, or financial advice. I am a licensed business broker, not an attorney or accountant. Every business and every sale is different, and laws and tax rules change, so talk with a licensed attorney and a CPA about your situation before you act on anything here.
