Structuring Deals with Expensive Real Estate?

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September 22, 2025

by a searcher from Wilfrid Laurier University - School of Business and Economics in Woodbridge, Vaughan, ON, Canada

Hello, I often find that the most difficult piece of structuring an acquisition (especially in Canada, where many of my deals are) is the real estate component when it is owned by the business. Often the real estate is worth more than the business, and aside from saving the money of leasing to a third party, it really hampers cash flow and increases the cash at risk.. This is especially an issue when you are investing long term and won't have a liquidation event. I'm curious if anyone has used any more creative deal structuring around real estate? For instance, I have "rented" for a portion in the past (while leaving it on the books), and then done a larger lump payment later on for the remainder. Would appreciate thoughts and ideas
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Reply by a professional
from York University in Toronto, ON, Canada
Sale and leaseback of the property is an option. Or sale of the property and move to another (leased) location. Another option (but could be more complicated) is having different investors for the RE and the business We can connect via DM if you'd like to chat in more detail
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Reply by a searcher
from University of Kentucky in Houston, TX, USA
Thank you for the tag, ^redacted‌. The way we structured it is to create a two tier structure, with a HoldCo at the top holding an OpCo and a ReCo. The ReCo holds the RE and leases it to the OpCo. This structure allowed us to independently target asset specific investors. Further, if we wanted to just sell the RE down the line, this structure provided us with that flexibility. There are other nuances that provides tax advantages in the U.S. as well. More than happy to chat if there is interest. All the best! —Madan.
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