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Should I sell the real estate separately or along with the business

The Question

I have been working diligently on preparing my business for selling on your web site. I have a few questions and I hope you can help me reach a decision. Should I wait for a business evaluation for a better idea of what my business may be worth? My other question is should I go ahead with a property appraisal to get a good idea of my property's worth? I have a well established dinner business and my grandparents started this business at the same location in 1934. I have a lot of property along the block where my business is located. Another dilemma, should I try to sell all in one package price or split the real estates.

The Answer

If you don’t know what a reasonable asking price would be for your restaurant or your property and you were planning to get them appraised, then yes, I would definitely hold off on putting them on the market until the appraisals are done.

As far as selling the restaurant with the property remember this: most people who want to buy a restaurant want to be a restaurant owner, not a real estate investor or landlord.

You write: “I have a lot of property along the block where my business is located. “ It sounds like you have a lot of property in addition to just the building where the restaurant is located? If that is the case than all the more reason to separate the real estate from the business - it will be much simpler to sell each piece to a person knowledgeable in just that field. Like I said, most restaurants buyers don’t want to be landlords also.

Here’s something to think about. If you sell the restaurant first, you will be the buyer’s landlord until you sell the property. Make a long term lease (at least 3 years) with a fair rental rate part o f the sale. This way your buyer is assured that when the property sells things won’t change for him and his restaurant.

On the other hand, if you sell the real estate first, let the buyer know you plan to sell the restaurant and make the real estate deal contingent on the real estate buyer signing YOU to a long term lease that is TRANSFERABLE to the buyer of your restaurant. This will make your restaurant much more attractive to a buyer since they will know exactly what their rent will be for at least the next 3 years.

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