If you own the building your preschool operates in, congratulations—you’re in a strong position. Real estate ownership gives you leverage, flexibility, and additional income potential during and after the sale of your business.

But it also adds complexity. Selling a preschool with real estate involves different types of buyers, financing structures, and tax considerations. Whether you sell the building, lease it, or hold onto it long-term, your decision will directly shape your exit strategy.

Let’s break down what every preschool owner needs to know when it comes to real estate and selling their business.

Why Real Estate Ownership Changes Everything

When you’re not just selling the business—but the building too—your deal becomes more layered. It moves from a simple small business transaction into a dual sale involving commercial property.

That matters, because:

• The buyer pool shifts depending on whether you’re selling or leasing the building.
• Financing requirements double, often involving two separate loan types.
• The tax impact can be significant and needs to be carefully planned for.

This isn’t a bad thing—but it does mean you need a strategy that accounts for both assets.

3 Real Estate Exit Options for Preschool Owners

1. Sell the Business and Real Estate Together

This is the most straightforward path: one buyer, one transaction. It’s often ideal when the buyer is SBA loan–qualified and wants to own both the center and the property. This can create strong value, especially if the school is profitable and the building is well maintained.

Pros:

• One clean deal
• Often appeals to experienced buyers
• Maximizes efficiency and speed

Considerations:

• Buyer must qualify for both the business and the real estate loans
• Limits the pool to buyers with stronger financials

2. Lease the Real Estate to the Buyer

If you want to hold onto the property and generate long-term income, you can lease it to the new preschool owner. This is a great option for owners who want to stay invested passively or maintain control of the land.

Pros:

• Monthly rental income
• Retain ownership of a valuable asset
• Expand your retirement or investment portfolio

Considerations:

• Lease terms must be lender-friendly (triple-net preferred)
• You’ll still be involved as the landlord
• Buyers may still negotiate lease terms into the purchase offer

3. Sell the Business and Real Estate Separately

In some cases, separating the business and the building—either by selling them to different buyers or at different times—can yield a higher overall return. But this route requires experienced coordination and more time.

Pros:

• Could attract a broader range of buyers
• May result in higher total net value
• Opens the door to investors, landlords, or developers

Considerations:

• More complex legal and financial planning
• Delays may slow the sale
• Requires strategic timing and strong communication

How Deal Structure Impacts Your Buyer Pool

Real estate isn’t just a financial decision—it’s a strategic one. Depending on how you handle the building, you’ll attract very different types of buyers:

• Owner-operators often want to buy both business and real estate
• First-time buyers may prefer to lease initially
• Investors want secure, long-term leases and stable operators
• Sale-leaseback buyers are focused on cap rate, building condition, and tenant strength

The way your deal is structured determines who shows up—and how much they’ll be willing to pay.

Don’t Forget: Taxes, Timing, and Strategy

This is where real estate can either support or sabotage your long-term goals. Selling property can trigger capital gains taxes or depreciation recapture, while leasing may provide more stable, lower-taxed income.

Your CPA should be involved from the start to help you:

• Understand your tax obligations
• Explore options like a 1031 exchange or installment sale
• Evaluate the long-term retirement impact of each path

A Final Word of Advice

If you own your preschool building, you don’t just have an asset—you have negotiating power. But only if you use it wisely.

Don’t make these decisions in a vacuum. Talk to your broker, your CPA, and your legal team. Build a structure that aligns with your goals—not just your sale price.

Need help thinking it through?

✅ Download the free Real Estate Exit Strategy Planner https://go.chelseareue.com/RealEstateExit

📞 Or book a private strategy call with me to discuss your specific deal. https://go.chelseareue.com/StrategySession