Every thriving Southern California manufacturing or
logistics company started somewhere—often at a kitchen table or in a garage.
What happens between that first spark of an idea and the eventual decision to
sell the company is a fascinating—and often overlooked—journey. The
throughline? Real estate.
The Stages of Business Growth and Real Estate
Decisions
The Idea Stage. Home-Based Operation. Most
businesses start small. At this stage, real estate decisions are limited—but
the dream of expansion is already forming.
Lease vs. Buy. The First Big Decision
As soon as a company outgrows the home, it’s time to
lease or buy space. Leasing provides flexibility, but ownership plants the
first seeds of wealth building.
Owning Your Building. Many family operators
eventually buy the building they occupy. This decision transforms monthly rent
payments into an appreciating asset that can outlast the business itself.
Growth Through Expansion or Acquisition. Success
brings complexity—hiring more people, adding machinery, opening new locations,
or acquiring competitors. Each move requires thoughtful real estate strategy.
Exit Planning and the Role of Real Estate.
Eventually, founders face succession or sale. If selling to a strategic
operator, the real estate may be carved out of the deal. If selling to private
equity, the real estate is often critical to their investment thesis.
The Hidden Lesson
In many cases, I’ve seen the real estate owned by
the business worth far more than the operation itself. That building becomes
not just a workplace but a long-term family asset, a hedge against business
cycles, and a powerful vehicle for generational wealth.
Closing Thought
The journey of a family-owned business in Southern
California is never just about products, people, or profits—it’s also about
property. Whether starting in a garage or exiting through a private equity
sale, real estate is the silent partner that can shape the legacy of a business
for generations.
Allen C. Buchanan,
SIOR, is a principal with Lee
& Associates Commercial Real Estate Services in Orange. He can be reached
at abuchanan@lee-associates.com or 714.564.7104. His website
is allencbuchanan.blogspot.com.
