How to Maximize Value and Minimize Execution Risk When Owned Real Estate Is Part of the Equation
Sell-side investment bankers manage a wide range of moving parts—positioning businesses, guiding owners through the process, managing diligence, and running competitive dynamics. Amid all of this, one component often receives less attention at the outset than it should: owned real estate.
Real estate may not be central to an operating company’s value proposition, but it often represents a meaningful share of total enterprise value. When it isn’t evaluated or structured correctly early on, it can lead to suboptimal proceeds for the seller, valuation disconnects, unnecessary re-trade risk, elongated and—in some cases—failed processes. The challenge typically isn’t the real estate itself, but rather how and when it’s addressed.
At SLB Capital Advisors, we regularly work with investment bankers and private business owners to determine the optimal approach for owned real estate in an M&A context. In most situations, the real estate strategy falls into one of four paths:
- Pre-M&A sale leaseback
- Concurrent sale leaseback
- Selling the real estate and operating company to the same buyer
- Selling the operating company while retaining the real estate
Each path carries distinct implications for valuation, structure, negotiating leverage, and execution. Selecting the optimal approach early can preserve momentum, reduce uncertainty, and enhance total proceeds.
To access our primer “Avoiding Real Estate Surprises in a Sell-side M&A Process,” please provide the following information and it will be provided via email.