Our practice centers around family-owned and operated manufacturing and logistics businesses experiencing a transition.
Recently, I wrote about common transitions a small business experiences, such as the dissolution of a partnership, sale of a business, acquiring a competitor or the unfortunate circumstances of the death of a principal, divorce or some other distress within the enterprise.
As reviewed, all of these transitions come with their own brand of commercial real estate solutions.
As an example, when a competing company is acquired, two cultures must be forged into one — akin to a blended household. As you can appreciate, this can cause some drama. As the operations are morphed, so must the locations from which they occur. Frequently, redundancy is experienced.
Specifically, two buildings within the same submarket where only one is needed means, consequently, one must be jettisoned.
But, let’s examine the flip side: the seller of the acquired competitor.
When the sale of a business happens, the addresses from which the trades are plied are either owned by the principal selling or leased by said principal. In the circumstance mentioned above where two facilities are within the same geography, two different strategies are employed.
If the redundancy is leased and a decision is made to abandon the building, we can sublease, pay double rent until the term boils off, or default, which is never recommended. If owned – without an occupant – we can sell the empty building or lease it and hold on or possibly sell the leased location to an investor.
But how about the chosen building — the one selected to carry forth the business of the company and not deemed excess? Then what? A building owner finds herself in a position to assign the lease agreement if appropriate, or sell or lease the building to the acquiring group.
All of the above scenarios contemplate the moves made AFTER the business sale. But are there maneuvers before such a liquidation?…
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