When owners think about selling their company, they think about revenue, profit, and a multiple. What they almost never account for is the way their real estate quietly reshapes the number — sometimes by a lot. If your business owns or leases the space it operates in, here’s what’s really going on under the valuation.
Business value, in one sentence
Most small and lower-middle-market companies are valued on a multiple of earnings: EBITDA (or owner earnings) × an industry multiple, often roughly 2x–5x. So a business with $400,000 of normalized earnings at a 3.5x multiple is worth about $1.4M. Simple — until the real estate distorts the "earnings" part.
The hidden rent problem
If you own your building, your P&L probably has little or no market rent in it. That makes your earnings look higher than a buyer’s will once they have to pay rent (or buy the building). A buyer normalizes your EBITDA by subtracting market rent — and at a 3.5x multiple, every $50,000 of rent that gets added back to expenses is about $175,000 off the business price. Owned real estate cuts both ways: it can inflate your earnings today and deflate the multiple-based value unless it’s handled correctly.
See both numbers: the free business + real estate value tool shows your enterprise value, the property value, and the combined total side by side.
The property is its own asset
Here’s the good news the hidden-rent problem sets up: the building is a separate, valuable asset. In South Florida that value is real and knowable — recorded sales put warehouse and industrial property around $289/SF in Broward and $316/SF in Miami-Dade, retail far higher (see the price index). A 6,000 SF building isn’t a rounding error on your exit; it can be worth more than the business.
Sell together, sell separately, or lease it back
Once you separate the two values, you get options most owners never hear about: sell the business and the property together to one buyer, sell them to two different buyer pools, or keep the building and lease it back to the buyer (a sale-leaseback) so you collect the business sale now and hold an income asset. Each nets a different total — and the difference is often six figures.
The takeaway
Your real estate isn’t a footnote to your business sale; it’s a lever on the price and the structure. Value the two together, normalize the rent, and decide the structure before you go to market. That intersection — business valuation and real estate — is exactly where I work. Start with a free combined value estimate or a confidential business-sale conversation.
