In the world of commercial real estate, withco occupies a unique space. Unlike most institutional commercial real estate investors, withco purchases commercial properties with the goal of helping small business owners work toward purchasing the property from them down the road through their lease-to-own model.
For brokers, this means that they 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 withco does, and they want to ensure their small business partners are set up for success. They always thoroughly underwrite their small business partners to ensure what they can afford and whether property ownership is right for them. Their ideal small business partner has demonstrated success and a history of on-time rent payments.
Here’s how withco works with small business owners:
Stay: They 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 their way!
Move: Many of their small business partners are looking to move to a new location that better fits their business. withco helps with their property search and ensures they are connected to a trusted broker.
Expand: They 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 withco's lease-to-own agreement is like any other lease with one large distinction: the small business has the option to purchase the property from them 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 them.
withcho typically invests in single-tenant properties valued between $300,000 to $5,000,000 with a cap rate of at least 7%. They currently operate in all 50 U.S. states.
One of the best reasons to work with withco is that they will make an all-cash offer on the property once they have underwritten the small business owner and the real estate. This ensures a quick closing (and faster commission) for you and surety for their partners. They handle all the negotiations and due diligence themselves 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.
withco provides much more transparency and certainty on day one (and don’t forget the downpayment). When they purchase the building, they 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 withco transfers 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 withco doesn'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, withco can do a modified sale leaseback that puts them back on the path to ownership to re-purchase from them in 5 years. Think of it as a sale leaseback sale. It’s essentially the exact same lease-to-own product as their standard purchase process, but in this case they'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 their 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. withco makes it easy for business owners to own their space and build equity in their building. Business owners no longer have to feel overwhelmed or under-qualified for this type of opportunity.
Ultimately, withco is passionate about revitalizing the dream of small business owners to own the space where they operate in their communities. That’s what drives withco to innovate in this unique lending space, and it’s what makes them the best partner for any small business property you might have that fits their buy box.
To learn more about partnering with withco, please visit their website here: http://with.co/join