An investment fund run by the real estate firm Related Beal rang in the new year by purchasing five historic buildings in the heart of downtown Boston from Fidelity Investments. For fellow Bostonian business owners, the deal begs a popular commercial real estate question: Is it time to sell your office?
Here are five legal questions to ask yourself before you put your commercial property on the market:
- Are you sure you want to sell? If you're not completely ready to break all ties with your commercial property, a viable alternative is to lease the property to other businesses. Use the current climate of the property and rental market, as well as your own particular needs, to guide your decision.
- What are the tax implications? Selling property can trigger certain tax consequences, such as the federal gains tax. But if you're also on the hunt to purchase property, you could potentially limit your tax liability through the 1031 exchange process. You'll want to speak to an experienced tax attorney to hash out all of the potential tax implications.
- Are your business valuation methods reliable? If you're thinking about selling your business, you need to know the different business valuation methods in order to get the best price possible. The three basic approaches to business valuation are the market-based approach, the asset-based approach, and the income-based approach. You'll also want to factor in intangible considerations such as the customer goodwill your business has engendered over the years.
- Do you have a good record-keeping system? Selling property is always a stressful time, but it's important that repairs, inspections, and other evaluations are properly recorded. Make a plan for how these procedures will be documented and kept for potential buyers.
- Where will your business move? If your business is on the prowl for a new space, don't forget to ask yourself the million dollar question: to rent or buy? The logistical and financial details of your new office agreement may impact your negotiations in your sale, or vice versa.
Selling commercial real estate may feel like a daunting process, but an experienced Boston real estate attorney can help guide you every step of the way.
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- Buying or Selling? Protect Yourself From Shady Realtors (FindLaw's Boston Real Estate News)