Jason Taken is a business broker. Conveying the dirt requires a properly licensed real-estate broker for that piece. HedgeStone will not pretend those licenses are the same. Sale-leaseback is the keep-the-plant path. This page is the sell-both and the split-decision page.
Why are the two prices different instruments?
A buyer of earnings underwrites cash flow, concentration, and iron. A buyer of industrial property underwrites rent, roof, slab, power, clear height, environmental condition, and alternative-use. Those people are sometimes the same human. The models are not the same spreadsheet.
Valuation for the company still carries size band × sub-sector. The building does not get a 2.75x SDE. It gets a real-estate conclusion. If you need a cap-rate number, hire the credentialed appraiser. This site will not invent one.
| Decision | Company buyer sees | Building buyer sees | Usual friction |
|---|---|---|---|
| Sell both to one party | One project, 504 possible | Occupancy and special-use tests | Stacking 7(a) and 504 |
| Sell company, sell building to investor | Lease they must live with | Credit of the new tenant | Lease draft timing |
| Sell company, keep building | Rent they will pay you | Your landlord risk | Related-party lease scrutiny |
| Third-party landlord already in place | Assignment / remaining term | Landlord consent | Consent delay |
SBA buyers often want the building because they will stand in it. 7(a) maximum remains $5 million. 504 standard debenture $5 million, $5.5 million per qualifying small-manufacturer project (Source: SBA). Combined 7(a)+504 can reach $10 million for loans approved on or after 2026-07-04 (Source: SBA announcement). Occupancy: existing building generally ≥ 51%; new construction ≥ 60%. Confirm the live SOP. This is not a commitment.
Illinois sellers should also know the Business Brokers Act registers business brokers unless an exemption applies, and real estate as the dominant element can pull the deal under the Real Estate License Act (Source: Illinois SOS). Counsel confirms the posture. Other states differ.
What diligence attaches to the dirt that the CIM likes to skip?
Phase I ESA under ASTM E1527-21 for All Appropriate Inquiries (40 C.F.R. 312). Components generally stale after 180 days. Environmental issues is the longer page. Plating, solvents, tanks, foundry sand, and paint booths are regular REC sources.
Survey, title, easements, rail spurs, truck courts, power service, floor load, crane rails, and whether the special-use plant has a next tenant if the buyer fails. Transfer taxes are local. Successor sales-tax and tax-clearance certificates still exist in several states even where UCC Article 6 is gone. A CPA in the closing state owns that list.
Quality of earnings does not replace a building appraisal. Related-party rent in the recast will be tested. If you paid yourself $4 per foot and the market is $8, the company’s earnings were overstated and the building was under-rented. Fix the story on both sides.
How should mortgages, liens, and the peg interact with the plant?
Payoff letters early. Cross-collateral that ties machines to the mortgage needs a conversation before the teaser. The working-capital peg is about AR, inventory, and AP — not about the roof. Do not let a buyer roll deferred maintenance of the building into a working-capital true-up.
If the mortgage exceeds what a 504 stack can support, say so. A pass is cheaper than a six-month exclusive that dies in underwriting.
Personal residences on the same parcel, family LLCs, and ground leases are structure, not folklore. Draw the entities. How it works still applies: teaser, NDA, staged room. The building packet can follow the company packet. It should not contradict it.
What does an illustrative split look like?
Illustrative only.
Opco recasts to $520,000 SDE. Building is a 42,000-square-foot industrial with a remaining mortgage. Seller wants one check. Buyer is an individual who can use 7(a) for the company if enterprise value fits the $5 million box and 504 for the plant if occupancy and the small-manufacturer test fit. Two appraisals. Two sets of counsel. One close date if everyone is competent. If the seller instead adds “the building is worth about a million” into a 3x SDE conversation, both numbers are now fiction.
A second file: the owner wants to keep the dirt and collect rent. That is the leaseback page. Do not negotiate that rent as a rounding error in the CIM.
How should the teaser mention the plant without mapping the shop?
“Includes owned industrial real estate, offered together or separately” is enough. Do not print the street. Do not print a unique water tower. Do not print “the only 10-acre plant in the county with rail.”
Sell my manufacturing business is the pillar.
What plant features change the real-estate buyer set more than the company multiple?
Power service and transformer capacity. Floor thickness and pits. Crane rails and tonnage. Clear height. Truck courts and rail. Hazardous occupancy. Whether the building is special-use enough that a failed operator leaves you with a monument. Those facts decide whether an investor will buy the dirt if the company buyer will not.
A 504 occupier-buyer cares about eligibility and occupancy percentages (Source: SBA). An investor cares about the lease and the next tenant. Do not write one teaser sentence that pretends those people are the same.
If the plant sits on a parcel that also holds a house, a farm, or a second LLC’s warehouse, draw the survey early. Mixed-use surprises kill stacks.
How should title, survey, and landlord-estoppel work sit on the commercial calendar?
Order them when the recast starts, not when the lender asks. Easements for utilities and shared drives show up late and eat weeks. A survey that disagrees with the legal description is a 223-day-class delay you did not need.
If you are not the landlord and a third party is, consent and estoppel are on the critical path. Start them when the short list exists. Waiting until the week of close is how wires slip.
Transfer-tax estimates belong on the same page as the cap-rate conversation. Local. CPA and a real-estate closer. Not a teaser.
Illustrative only: 38,000-square-foot industrial, clean title, Phase I already in hand, 504 path for an occupier, opco on 7(a) inside the $5 million box. Two appraisals. One close date. The owner who instead added “building worth about a million” to a 2.8x SDE sentence spent three months unmixing the number.
What personal-guarantee and cross-collateral traps sit on the mortgage?
If the mortgage also liens the VMCs, the opco sale must pay that off or obtain a release. If a spouse guaranteed the note, they are in the closing whether they run the floor or not. If a HELOC sits on the plant, it is not “personal.” List it.
What environmental and occupancy facts should be on the same one-pager as the stack?
Write four lines: Phase I status and date; generator and air-permit posture; 504 occupancy path if an occupier-buyer is likely; whether the mortgage cross-collateralizes machines. That page saves a month of “we thought the other person had it.” SBA 504 occupancy remains a lender confirmation (Source: SBA). Phase I remains an EP product. The one-pager is only a tracker.
If the plant is special-use, add a fifth line: what a next tenant would even be if this buyer fails. Monument risk is why some owners lease back instead of selling the dirt into a thin stack.
Illustrative only: 41,000-square-foot industrial, 504 occupier, 7(a) opco inside the $5 million box, Phase I already 70 days old. Close holds because the tracker existed. The twin file that discovered a machine lien inside the mortgage in week nine did not hold the first exclusive.
How should you handle a building that is too big for the book that remains?
Empty bays look like unused rent and unused 504 occupancy. If you mothballed a wing, say so and decide whether it is in the deal. A buyer who must occupy 51% of an existing building under 504 rules (confirm with the lender) may not want to pay for a dark warehouse. A leaseback tenant may not want to heat it.
Subdividing, selling a slice, or excluding a parcel are real-estate moves. They need a survey and a licensed real-estate broker. They are not CIM poetry.
Illustrative only: 80,000 square feet, 40,000 used, declining book. Occupier-buyer wants the used half. Seller who insisted on one price for the monument waited a year. Split the dirt decision from the opco decision.
What access, parking, and truck-route facts belong in the building packet?
If trailers cannot turn, say so. If a neighbor owns the driveway, say so. If parking is on a city lot, say so. Those facts move occupier-buyers more than a pretty photo of the facade — which you should not put in a teaser anyway.
A last dirt habit: if a family LLC owns the plant and the opco pays rent by habit, write the lease you already live before a buyer invents one. Implied leases become QoE and 504 problems at the same time.
One more dirt note: if a family member lives in an apartment inside the plant, that occupancy is a diligence fact and a 504 occupancy fact. Move them or disclose the arrangement. Surprise bedrooms are not charming in underwriting.
Educational information only. Real-estate brokerage, environmental work, and 504 occupancy are licensed lanes. No stack is guaranteed. Mark keep-versus-sell on the keeping vs selling the real estate scorecard before anyone buries a cap rate inside SDE.