Property Tax as SDE Add-back?

by a searcher from Georgetown University - The McDonough School of Business

3 years ago

My view is property tax would not be a valid add-back as it is not discretionary in a NNN lease situation. Anyone seen it included and how did you negotiate it out of SDE?

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searcher from Harvard University - Harvard Business School

I've not seen that as an add back. The definition of add back is discretionary to the owner. If the NNN lease is locked in for multiple years under your ownership, it is not discretionary/related to the owner. If you could reasonably relocate the business to a place where it would not be a cost, then MAYBE. (e.g. if he was selling to a strategic buyer, this might be a synergy for them relocating the business to an existing property they already pay for. but this is still more of a synergy in that case than an add back). I'd approach it from "what is an add-back" in the discussion. And I would just exclude it from your bid... no one will pay that as an add back

3 years ago | like reply | 1 like

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