Working on a residential care homes transaction, the group operates from 8 properties all owned. The plan is to acquire the group with a 7x - 8x ebitda multiple, then piece off the property on a sale and leaseback. Obviously the ebitda will drop by the rents payable to the new landlords. The vendor will keep 25% equity in the new group, but equity value will be reduced since we are taking all the property out. So looking to see how much we sell/adjust for the 25% retained equity stake in a leasehold position.

Question: What is the difference in valuation multiple for a Freehold vs Leasehold acquisition?