By Tom Bigansky, Broker/Owner, North Village Realty
Many business owners are interested in selling their commercial building but are not ready to leave it. They may want access to the equity, less responsibility for other tenants, or a smaller footprint while continuing to operate from an established location.
The concern we hear most often is control. What happens to the business once someone else owns the building? A sale-leaseback can address continued occupancy, but the arrangement has to work for both parties. The space, rent, lease term, and responsibilities deserve attention alongside the purchase price.
What is a sale-leaseback?
In a sale-leaseback, an owner sells the real estate and leases back all or part of it from the purchaser. The seller receives sale proceeds, subject to debt payoff and closing costs, and becomes a tenant under an agreed lease.
The business may remain in its existing space, downsize within the property, or retain one portion while the buyer occupies or leases the rest. The right structure depends on the building and the needs of both parties.
Start with the space your business actually needs
Before discussing a sale price, we ask how much space the owner wants to keep. Some need the entire building. Others have more space than they use, or would prefer to stop managing unrelated tenants.
For a partial leaseback, identifying the square footage is only the beginning. Entrances, parking, shared areas, utilities, and access need to support the proposed arrangement. A plan that works on a floor plan still needs to work in day-to-day operations.
Agree on the occupancy terms before committing
An owner should not feel pressured to accept a sale proposal that leaves the business with unsuitable occupancy terms. We establish the seller's priorities early, then seek buyers willing to consider that structure. A buyer's interest in the building does not by itself mean there is an agreement.
The main points include how much space will be leased back, the starting rent and increases, the length of the lease, any renewal options, and the allocation of operating and repair expenses. Those terms should be negotiated together with the sale and documented with the parties' attorneys before closing.
A lease can provide agreed occupancy rights for a defined term, subject to its conditions. It does not preserve every right of ownership. That makes it important to address the control the business actually needs rather than assuming that staying in place means nothing will change.
The highest sale price may come with a larger rent obligation
A purchaser evaluates the income and risk of the proposed lease. The seller evaluates the proceeds and the ongoing cost of remaining in the building. Those perspectives are connected.
A higher rent may support a higher purchase price, but it also becomes an obligation for the business. The full arrangement needs to be evaluated, including rent increases, expenses, lease duration, and the business's ability to carry those costs. A headline price alone does not tell an owner whether the transaction makes sense.
Our guide to understanding your commercial building's value explains why lease terms and operating expenses belong at the center of that analysis.
East Meadow: keeping space while selling the real estate
At 325 Merrick Avenue in East Meadow, North Village Realty represents the seller in a medical office transaction under contract. The planned structure combines a long-term leaseback for the seller with space for the purchasing end user and income from other tenants.
The goal is to allow the seller to receive proceeds from the real estate sale while continuing to operate in the space it needs. The buyer's occupancy requirements and the seller's plans are considered together. This shows why a sale-leaseback does not always require the seller to lease the entire property.
Oceanside: matching a practice with an income-focused investor
At 2983 Long Beach Road in Oceanside, North Village Realty is handling a medical property under contract in a triple-net sale-leaseback involving a dental practice specializing in sleep apnea. The purchaser is a private investor seeking passive income.
Here, the buyer's focus is the investment income rather than occupying space. The lease, tenant financial strength, and property's characteristics are central to that evaluation. The specific agreement determines which expenses and responsibilities remain with the tenant and which belong to the owner.
Both examples are under contract as of November 7, 2026, rather than completed sales. They illustrate different proposed structures, not a single formula that suits every business.
When staying an owner may make more sense
A sale-leaseback is worth exploring when an owner wants sale proceeds and continued occupancy, but it is not automatically the right answer. The required rent may not fit the business, the available lease term may not provide enough certainty, or the owner may place greater value on keeping control and future appreciation.
Selling also does not necessarily eliminate every property responsibility. An owner hoping to simplify operations needs to understand the proposed lease obligations before deciding whether the arrangement achieves that goal.
Discuss the arrangement before marketing the building
At North Village Realty, we begin with what the owner wants to accomplish: how much space to retain, how long to stay, what occupancy costs are workable, and which responsibilities they want to transfer. We then evaluate the property's income and buyer audience to determine whether a sale-leaseback is a realistic option.
That preparation allows buyers to respond to a clear proposal. It also gives the seller a basis for comparing offers on both the sale terms and the business's needs after closing.
Thinking about selling your building while keeping your business in place? Contact Tom Bigansky to discuss the space, timing, and lease arrangement you would need before considering a sale.
Discuss Your Property and Leaseback Options · Call (516) 255-4300