IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities.  Periodically, we will post guest blogs from professionals with knowledge to share for the good of owners of privately held companies & family businesses. The following blog article has been provided by Grace Chang of IBA (https://ibainc.com/):

The Landlord – An External Third Party that can KILL a Business Sale Transaction

Landlords don’t usually make the headline in a business sale, but they absolutely can decide how the story ends. 

In many small and mid-sized business brokerage transactions, especially in the retail, hospitality, medical, and service industries, the lease is just as critical as the financials. I’ve been hearing more stories from colleagues at IBA and seeing it firsthand in my own deals, where a “big landlord” becomes the unexpected gatekeeper. In some cases, they don’t just slow things down… they stop the deal entirely.

Recently, I worked on a few transactions with very different types of landlords. One was a private, family-operated landlord. The other two were large institutional groups, each working through property managers, leasing agents, and legal teams. The contrast was striking.

With the family-operated landlord, communication was direct. Questions were answered quickly. There was room for discussion, flexibility, and, most importantly, decision-making happened in real time.

With the larger landlords, it was a different experience. Every step required going through layers: broker to agent, agent to internal team, legal review, then back through the same chain. Even small items took time. Weeks can pass on what feels like a simple clarification. It’s not that they’re being difficult for the sake of it, it’s just how large organizations operate.

But from a deal perspective, that structure creates friction.

Here are a few realities about working with “big landlords” in business transactions:

First, expect a longer timeline.

Lease assignments or new lease negotiations can easily become the pacing item for the entire deal. Buyers and sellers may be aligned, financing may be ready, but everything waits on landlord approval.

Second, qualification standards are often stricter.

Institutional landlords tend to have clear, non-negotiable criteria. They will review buyer financials, experience, and sometimes even business plans. If the buyer doesn’t check the necessary boxes, the targeted destination may never be reached for the transaction.

Third, flexibility is limited.

Unlike smaller landlords, large groups are often less willing to customize terms. Whether it’s lease structure, personal guarantees, or assignment conditions, there may be little room to negotiate.

Fourth, sellers may remain on the hook.

It’s not uncommon for landlords to require the seller to stay liable for a period of time after the sale, especially if the buyer is perceived as weaker. This can become a major point of tension late in the deal.

And finally, communication can feel slow and indirect.

You’re often not speaking to the decision-maker. You’re working through intermediaries, and that adds both time and uncertainty.

So what does this mean for buyers and sellers?

If a landlord is involved which they almost always are, plan for it early. Don’t treat the lease as a last-step formality. Start conversations with the landlord as soon as possible. Understand their requirements, their timeline, and their expectations for a new tenant.

For sellers, this also means preparing your buyer pool. A strong buyer isn’t just someone who can write a check, they need to pass the landlord’s filter. Sometimes the “best offer” on paper isn’t the most viable if the landlord won’t approve them.

For buyers, be ready to present yourself professionally. Financials, experience, references, these matter more than you might expect. In many cases, you’re not just buying a business, you’re applying for tenancy.

At the end of the day, landlords are a third party in the transaction with real power. Ignoring that reality is risky. Planning around it is essential.

A well-structured deal doesn’t just align buyer and seller, it anticipates the landlord.

And if you’ve been through a deal where everything lined up… except the lease—you already know how important this is as an issue.

If you have questions relating to the content of this article or the process associated with selling or buying a business, Grace Chang would welcome the opportunity to talk with you.  Ms. Chang can be reached at (425) 454-3052 or [email protected].

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, and real estate communities on subjects relevant to the purchase & sale of privately held companies and family businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing best practices.