One of the unintended consequences of Covid was a massive influx of humanity moving here. With that came rapidly appreciating land values in both the residential and commercial sectors.
I read with some sadness the closing of Ace Golf in Riverview Florida yesterday but was in no way shocked. A icon business that has served generations the ownership has sold for a healthcare facility and residential development. The owner stated quite accurately that “there wouldn’t really been a fight because there’s such a big difference between the value of the property and what it would be worth as a business ongoing.”
Part of exit planning for the baby boomer generation is having a very realistic discussion about what their business value is and what the land value is. Being able to sell both in tandem is a function of the business as an operating entity being able to service both the business deby and the debt on the land acquisition. If you can’t do that the owner must become a landlord. Now it gets even more complicated because if the land is that valuable the market rents are probably high and thus decreasing the cash flow to the buyer and therefore the business value.
Timing is everything people. As I mentioned in yesterday’s blog baby boomers have had a tough last couple of decades….knowing this as a potential hurdle at exit is something to be assessed and planned for
For more on buying and selling a Tampa Business Contact Michael Shea Tampa Bays Business Broker