Expiring leases on businesses for sale and what to look at

I recently received a question about businesses for sale that have leases close to expiring. The concern was whether this is common and whether it's a red flag. In my experience, it's actually not that common. That kind of uncertainty tends to hurt the sale process from the seller's perspective, so most sellers try to address it before going to market. But when you do see it, the first question is not "is the lease expiring a problem?" The first question is "who owns the real estate?" If the seller or the business itself owns the real estate, it's really not a big deal. You will be negotiating a lease with the person you are already in a transaction with. That's a conversation you can control. If it's a third-party landlord, that's a different situation entirely. You're now dependent on someone outside the deal to agree to terms that work for your capital structure and your lender. That's real risk that needs to be diligenced early, not discovered late. The real estate question comes up in almost every deal. Make sure you are asking it early in the process, not after you are already under LOI.