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California's Largest Restaurant Brokerage - Specializing in Sales, Acquisitions & Leasing of Restaurants, Bars, Clubs & Related Commercial Buildings

Restaurant Realty Company has Sold and/or Leased Over 150 Restaurant, Bar and/or Related Commercial Buildings During Covid

By in 2021 - Volume 23

How has Restaurant Realty been so successful in completing over 150 transactions during such a challenging period for the industry?

There are many reasons which include as follows:

1) Most of our agents and brokers are former restaurant owners and/or managers and understand how to relate to our seller clients having been in their role.

2) We spend a lot of money on internet marketing and are ranked in top positions on most of the key words relating to restaurant and bar sales so we have a large exposure to buyers from all over the world.

3) We obtain listings that are sellable. The industry average is less than 20% of all business listings sell and our sales success rate is over three times greater than our competitors.

4) We follow up closely with the seller and buyer with every aspect of the deal throughout the entire transaction process to assure the deal has a high success of closing escrow.

5) We have an extensive screening process to assure that any interested prospective buyer is operationally and financially qualified so his chances of being accepted by the landlord are strong and if there is bank financing involved the chances of the buyer being approved by the bank are strong as well.

6) Every one of our listings appears on10 businesses for sale websites and we send out email newsletters every week to our data base of over 60,000 buyers in addition to using social media extensively including Facebook, LinkedIn, Instagram, etc..

7) Most or our listings our confidential listings and we understand the importance of maintaining confidentiality throughout the entire sales process to assure that the employees will stay with the new owner and the existing customer base will stay intact.

What is happening to the restaurant and bar industry in California today?

Since the state opened up in June business was definitely improving and indoor seating was starting to take hold and there was generally an improvement for the industry other than the employee shortage. Since the Delta variant started up the past thirty days many restaurants recovery slowed down for those restaurants that were not set up as primarily a take-out and delivery model with significant outdoor seating venues. However, many sit down restaurants have pivoted to a large part of the business being outdoor seating and most cities in the state have been very liberal about the use of parklets and other creative methods of utilizing outdoor seating. Still the employee shortage is a real serious issue for operators and consequently many operators have had to reduce their days and hours of operations as they don’t have enough employees to staff their businesses.

Why is now a good time to sell your restaurant or bar if you are an older baby boomer and don’t have younger family members to take over the business?

1) The consensus is that capital gains tax rate of 20% will rise significantly and perhaps could double from its low rate due to all the excess government spending and consequently Congress potentially increasing taxes. Therefore, if you sell before the capital gains tax rate increases you could potentially save yourself a significant amount of taxes on the sale of your business.

2) The physical and emotional stress on older operators is dangerous to the operators physical and mental health and could put them in jeopardy of continuing to operate their business.

3) If the business is profitable there is the possibility of the buyer obtaining low interest Small Business Administration (SBA) Loans with fixed rates for a ten-year period or if they’re purchasing the building, they can obtain 25-year financing.

Why is now a good time to sell your restaurant and bar business in general if it is a profitable business?

1) Saving capital gains tax per the explanation in the paragraph above.

2) Buyer demand is very strong at this time. As a result of many people being laid off during the pandemic and a good number of the companies, they worked for having gone out of business or being down sized these people don’t want to experience this job insecurity again in the future. Consequently, they want to control their future destiny and believe if they own their own business, they’ll be in a better position to do so.

3) There is very attractive low interest long term SBA financing available for profitable businesses per the explanation in the above paragraph.

Why is it a good time to purchase and/or lease a restaurant, bar or related commercial building at this time?

1) Rents have bottomed out due to the large number of vacant restaurant and/or bar spaces that have been permanently closed and many landlords are more reasonable then during the pre-Covid period.

2) There are a lot of motivated sellers that are tired and worn out and are motivated to sell at a reasonable price. 3) If the business is profitable there are low interest Small Business Administration (SBA) loans available whereby a a buyer can purchase a business with a 15% or 20% down payment and finance the balance of the purchase price.

For further information, please contact Principal Broker Steve Zimmerman at steve@restaurantrealty.com or call 888-995-9701.

Now celebrating our 25th year, Restaurant Realty Company® has a successful track record completing transactions helping over 2,600 clients, selling/leasing over 1,300 restaurant, bar and/or nightclub businesses and nearly 50 related commercial buildings totaling over 2.6 Million square feet of commercial space leased and completing over 4,000 valuations. The majority of our staff have either owned and/or managed restaurants. Our deep experience as operators means we understand your business from the inside out. Restaurant Realty has Closed Escrow and/or Leased 100+ Deals during Covid!

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