In the world of commercial real estate, withco occupies a unique space. Unlike most institutional commercial real estate investors, we purchase commercial properties with the goal of helping small business owners work toward purchasing the property from us down the road through our lease-t0-own model.
For brokers, this means that we bring the institutional speed and certainty of a national credit transaction to local credit properties. Working with withco is, in many ways, similar to working with any other institutional investor, but with a few key differences—dare we say, unique advantages.
Helping small businesses own their commercial property is at the center of everything we do, and we want to ensure our small business partners are set up for success. We always thoroughly underwrite our small business partners to ensure what they can afford and whether property ownership is right for them. Our ideal small business partner has demonstrated success and a history of on-time rent payments.
Here’s how we work with small business owners:
Stay: We help businesses purchase the property they currently occupy. If you know of a single-tenant, occupied commercial property for sale, be sure to send them our way!
Move: Many of our small business partners are looking to move to a new location that better fits their business. We help with their property search and ensure they are connected to a trusted broker.
Expand: We also help business who are looking to open additional location(s) and will make sure they are connected with a broker in their property search.
How this works for the tenant: Entering into our lease-to-own agreement is like any other lease with one large distinction: the small business has the option to purchase the property from us at the end of the term with no upfront costs. How? Business owners earn their down payment each tine they pay their rent over the course of their withco lease. After five years, they can take out a mortgage to purchase the building from us.
We typically invest in single-tenant properties valued between $300,000 to $5,000,000 with a cap rate of at least 7%. We currently operate in all 50 U.S. states.
One of the best reasons to work with withco is that we will make an all-cash offer on the property once we have underwritten the small business owner and the real estate. This ensures a quick closing (and faster commission) for you and surety for our partners. We handle all the negotiations and due diligence ourselves and typically close within 45 business days.
Right of first refusal
You’re probably familiar with a ROFR (Right of First Refusal). This is common option included in most leases so that if an offer is made on a building, the owner is obligated to take the negotiated terms and price to the tenant and offer the tenant the right to step in and purchase the property first. Typically most small business tenants cannot act on a ROFR given the costs associated with buying the property.
At withco, we provide much more transparency and certainty on day one (and don’t forget the downpayment). When we purchase the building, we give insight into what the purchase price of the property will be at the end of the term. Therefore, the tenant not only knows how much they will be paying for the building in five years, but they can also begin to invest in the space knowing they are on the path to ownership. In addition, at the end of the lease when we transfer ownership of the property to the tenant they receive their down payment credit, avoiding any upfront costs. It’s a win-win for both parties involved.
It’s important to note that we don’t do traditional sale leaseback purchases. Instead, if a current small business owner-occupant needs to access capital in their property but wants to eventually resume ownership down the road, we can do a modified sale leaseback that puts them back on the path to ownership to re-purchase from us in 5 years. Think of it as a sale leaseback sale. It’s essentially the exact same lease-to-own product as our standard purchase process, but in this case we’re buying from the current owner-occupant rather than a separate landlord owner. This ensures that the small business can get back onto the path of ownership, knowing all of the benefits that come with it.
Smaller properties. Big investment muscle.
Because of our unique mission and the resulting buy box sizing, withco offers the perfect solution to one-off properties that fall outside the parameters typically sought out by other institutional investors. You get the certainty of an all-cash purchase and an accelerated timeline on a property that might otherwise be more effort than reward.
Proprietary underwriting tools
SBA guidance notwithstanding, small business mortgage lending has long operated in a gray zone between the rigorous regulation of residential lending and larger transactions. At withco, we make it easy for business owners to own their space and build equity in their building. Business owners no longer have to feel overwhelmed or underqualified for this type of opportunity.
Ultimately, we’re passionate about revitalizing the dream of small business owners to own the space where they operate in their communities. That’s what drives us to innovate in this unique lending space, and it’s what makes us the best partner for any small business property you might have that fits our buy box.