For Most Family Businesses, Success or Failure Is All or Mostly “Relative(s)”

Sills Cummis’ Jason Sobel was asked, “What advice would you give to a family business in New Jersey to help them succeed?”

According to Mr. Sobel, “Dealing with the real estate underneath the family business facility is key. Whether the business owns or long-term leases its real estate, there may be an opportunity to unlock its hidden value. This can be achieved in a number of ways: a sale/leaseback arrangement whereby the family sells the land on a tax-efficient basis (perhaps a 1031 tax-free exchange) and leases it back for as long as it expects to contin­ue to operate its business; relocate the business to a less costly or more convenient location and either entitle and sell the land as a redevelopment site or retain ownership and contribute it into a joint venture with an experienced redeveloper; or engage a redevelop­er for hire to redevelop the site and retain full ownership.”