top of page
The Challenge
Separate Businesses.
Local investors operated a business for several decades. The underlying commercial real estate asset and attached personal property were owned by a landlord entity, and the retail business was owned by a tenant entity. The tenant lease was set up as a net lease. The tenant entity largely handled operational and capital improvements, which rendered the landlord entity as a de facto holding entity. The existing structure resulted in inefficient workflows, cost disadvantages, and loss of economies of scale. The local investors also held their interests both through legal vehicles and personally, which made it challenging to investors that wanted to exit or alter their holdings. The local investors tasked Beplace with resolving these issues as part of a finance transaction.
The Solution
Finance, and Add-Ons.
Beplace analyzed factors such as location, control and operational workflows, and possible dispositions and estate planning ideas to propose a more appropriate setup. We recommended that the landlord and tenant entities exist and operate as distinct businesses. The landlord entity would exist entirely to own, operate, maintain, and improve the commercial real estate; and the tenant entity would exist entirely to lease the space and operate the retail business. Beplace also suggested that each investor hold their interest in a legal entity to simplify any potential disposition or estate planning activity.
The Result
New Business Setup.
The landlord and tenant entities were each reorganized into true distinct businesses. Each investor was set up with an entity, with each entity then owning an interest in either the landlord entity, the tenant entity, or both. The new multi-level entity structure resolved the issues between each of the business entities, allowed the landlord and tenant businesses to exist independently, minimized the number of entities, and limited the investor-to-business entity layers to just two.
* Beplace includes agents, directors, employees, managers, owners, or other stakeholders of Beplace whether individually or through Beplace.
bottom of page