Selling a Business With Real Estate: What to Do With the Land or Building

February 10, 2026
Blog, Buyside M&A
3 min read

Key Takeaways

  • If you own the property where your business operates, selling the business doesn’t mean you must sell the real estate too.
  • You can choose to sell both together, keep the property and lease it, or sell them separately—each has financial and tax implications.
  • Planning ahead can increase the value of your business and give you better leverage in deal negotiations.
  • PHG Advisory helps business owners understand and evaluate their options when real estate is part of the transaction.

For many business owners—especially those operating tire shops, auto body garages, or similar service-based businesses—owning the building or land where they operate is a key part of their long-term wealth. When it’s time to sell the business, figuring out what to do with the property becomes just as important as finding the right buyer for the operation itself.

Selling a business with real estate can create powerful opportunities for retirement income, estate planning, or reinvestment. But the best strategy depends on your financial goals, the type of buyer you’re dealing with, and the specifics of your property.

This blog outlines what to consider when selling a business with real estate and how to make informed decisions that align with your financial goals.

Option 1: Sell the Business and the Property Together

In some transactions, a buyer may purchase both the business and the real estate as a package, providing a full exit for the seller. This structure is often preferred by acquirers looking for long-term control and operational stability. It can also be easier to finance under certain loan structures, such as SBA 7(a) or 504 programs.

Pros:

  • Clean exit for the seller
  • Attracts buyers seeking full control of assets
  • Easier to secure financing with combined collateral

Considerations:

  • Limits the seller’s post-sale income opportunities
  • May require a formal real estate appraisal and added negotiation steps

Option 2: Sell the Business, Keep the Property, and Lease It

This option allows you to become a landlord after the sale—retaining ownership of the property and collecting rental income from the new business owner.

Pros:

  • Ongoing passive income
  • Retain long-term appreciation of the real estate
  • May appeal to more buyers if upfront capital is limited

Considerations:

  • Requires drafting a lease agreement (ideally before listing)
  • You’ll need to manage landlord responsibilities unless outsourced
  • Could limit future use or development of the property

Option 3: Sell the Real Estate to a Separate Buyer While Leasing It to the Business

In some cases, the buyer of the business prefers not to own the real estate directly. Instead, the property is sold to a different buyer—often a real estate investment entity—while the operating business enters a long-term lease. This structure allows the seller to exit both assets while keeping the business and property aligned under a lease agreement.

Pros:

  • Potential for better pricing by separating real estate and business value
  • Can appeal to real estate investors seeking stable rental income
  • Flexibility for the business buyer to focus on operations

Considerations:

  • Requires coordination between business buyer, property buyer, and seller
  • Lease terms must be clearly defined and favorable for all parties

Final Thoughts

If you’re planning to sell a business that includes property, don’t treat the real estate as an afterthought. How you handle the land or building can influence deal value, taxes, and your post-sale income.

Whether you’re looking for a clean break or a way to generate income in retirement, exploring your options early can put you in the best position to succeed.

FAQs

1. Do I have to sell my property when I sell my business?

No. You can sell the business and retain ownership of the property. Many sellers choose to become landlords, leasing the building to the new owner of the business. This can provide long-term rental income and allow you to benefit from future appreciation of the real estate.

2. What are the benefits of selling the business and property separately?

Selling the real estate to a different buyer—such as a real estate investor—can maximize overall value and attract a broader pool of potential buyers. It also allows business buyers to focus on operations while a separate party handles property ownership and leasing.

3. How should I structure a lease if I keep the property?

It’s best to create a lease agreement before marketing your business. Make sure the lease terms are competitive, clearly define responsibilities (maintenance, insurance, taxes), and offer the buyer long-term security. A well-prepared lease can make your business more attractive to prospective buyers.

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