Experience with deals where RE is worth much more than business?

by a searcher from Pennsylvania State University

3 years ago

I'm wondering if anyone has encountered a business where the income would struggle to cover the fair market lease/or service the debt to purchase the building.  Example is $2MM property that building is 50% utilized by a manufacturer that does $200K Ebitda.  

Curious to hear your thoughts.

0 likes
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4 comments

searcher from University of North Carolina at Chapel Hill

Might also want to look at ground leases. Similar to the sale-leaseback concept

3 years ago | like reply | 0 likes

intermediary from Wake Forest University - Schools of Business

Another consideration, the Adjusted EBITDA should take into account a fair market lease. So it it isn't the EBITDA and value of the company is overstated.

3 years ago | like reply | 1 like

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