One of the coolest things about doing the same thing for over four decades is that newer folks in the business often seek your advice. This week, the call came from someone — certainly not a novice — who found himself in an uncomfortable situation.
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He has a client who runs a successful manufacturing company and has for years. They own the building from which they operate their business and are generating significant cash flow from both the company and the real estate ownership.
The problem? The owner recently received an unsolicited offer from a private equity group to buy the business. The number was substantial — life-changing by most standards. Along with the offer came a proposal to sell the real estate to an investor and lease it back to the company under a long-term agreement.
Sounds simple enough, right?
Not exactly.
The broker’s discomfort came from the fact that his client suddenly found himself standing at one of the biggest crossroads of his professional and personal life. Selling the business could create generational wealth. Keeping the business could preserve identity, purpose and control. Selling the real estate might unlock additional capital, but it would also eliminate a hard asset that had quietly appreciated for decades.
In other words, this wasn’t simply a transaction. It was a life decision disguised as a deal.
That distinction matters.
One of the biggest mistakes advisers make is assuming every client is motivated solely by maximizing price. In reality, business owners often care just as much about employees, legacy, family dynamics, taxes, future income streams and emotional attachment as they do the final number on the closing statement.
“What should I tell him to do?” the younger broker asked me.
My answer surprised him.
I said, “Your job is not to tell him what to do. Your job is to help him understand the consequences of each choice.”
This tactic changes the conversation entirely.
When clients face major liquidity events, the adviser’s role becomes less about selling and more about guiding. That means assembling the right team — CPA, estate planner, business attorney, wealth adviser and real estate expert — and helping the client slow down long enough to think clearly.
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Too many decisions of this magnitude are made emotionally and justified financially afterward.
Sometimes the best outcome is selling everything and sailing into retirement. Sometimes it’s recapitalizing the business and keeping the real estate. Sometimes it’s selling the company but retaining ownership of the building as a passive income investment. And occasionally, after examining all the angles, the client decides to do absolutely nothing.
Doing nothing is still a decision.
I also reminded him that owners who have operated businesses for 30 or 40 years often underestimate how much of their identity is tied to the company. Monday morning looks very different after the deal closes. I’ve watched highly successful entrepreneurs struggle more with the loss of routine and purpose than with the economics of the transaction itself.
Real estate professionals who stay in this business long enough eventually realize we are not simply negotiating leases and sales. We are often helping people navigate transitions: growth, loss, succession, retirement, partnership disputes, family changes and legacy planning.
The buildings are just the backdrop.
The experienced brokers understand this. The elite ones embrace it.
And perhaps that is one of the greatest privileges of longevity in our business. Over time, clients stop calling you merely because you can complete a transaction. They call because they trust your judgment when the stakes are high and the decisions become personal.
That trust is earned one conversation at a time.
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at [email protected] or 714-564-7104.
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