Types of Real Estate Business Sales That Need an IM
An Information Memorandum is used in several types of real estate-adjacent business transactions:
- Commercial property businesses — selling a property investment portfolio or commercial landlord operation as a going concern
- Real estate agency sales — selling the business of a real estate agency, including the rent roll, the team, and the brand
- Hospitality businesses — where the commercial lease and venue fit-out are major components of the sale value
- Retail businesses — where the lease terms, foot traffic, and fit-out are central to the business's performance
- Childcare centre sales — where the property approval and the built-out facility are significant assets
- Healthcare clinic sales — where the property, fit-out, and lease terms affect buyer willingness to pay
- Owner-occupied business sales — where a commercial property is being sold along with the operating business
Key Property Sections in a Business Sale IM
For any business sale where property plays a significant role, the IM should include dedicated property sections covering the following:
- Premises description — address, title details (for owned property), floor area, parking, accessibility, and condition
- Lease terms (for leasehold businesses) — current rent, rent review mechanism (fixed increase, CPI, market review), lease expiry, option periods, landlord consent requirements for transfer
- Outgoings — rates, insurance, maintenance obligations, and any contributions to building management costs
- Fit-out value — book value and replacement cost of tenant improvements, ownership of fit-out items, and any make-good obligations on lease expiry
- Equipment — owned vs leased equipment, current book value, age, and condition
- Property valuation (for owned property) — most recent independent valuation or council valuation for reference
- Zoning — current zoning classification and any planning conditions that affect the business use
- Property risk factors — any upcoming rent reviews, lease expiry within 3 years, or redevelopment risk
Real Estate Agency Sales: The Rent Roll IM
The sale of a real estate agency — particularly one that manages a residential or commercial rent roll — is a specialist transaction type. The primary value driver is typically the rent roll (the recurring property management revenue), rather than the sales commission business which is more volatile.
An IM for a real estate agency should include: total number of properties under management, total management income (annual), average management fee as a percentage of rent, vacancy rate, average property value in the portfolio, tenure of the rent roll (how long properties have been with the agency on average), staff structure including property managers, any tied sales relationships, and the franchisor relationship if the agency is franchised.
MemorandumMaker's professional services industry prompts cover many of the elements needed for an agency sale. Brokers handling agency transactions should add a dedicated rent roll section using the IM's appendix and additional sections feature.
The Lease: The Most Critical Document in a Hospitality or Retail Sale
For hospitality, retail, and similar location-dependent businesses, the commercial lease is often the single most important factor in a buyer's decision. The IM must address the lease in detail — not just the current rent figure.
Buyers want to know: How long does the lease have to run? Are there option periods and what are the conditions for exercising them? Who is required to provide consent for the lease to be assigned to the new owner — and what conditions may that landlord impose? What is the rent review mechanism, and when is the next review? What are the outgoings? Is there a make-good obligation that could cost tens of thousands at lease end?
A strong IM presents lease details clearly, addresses the transfer consent process, and — where there is a risk — proactively explains how the risk is managed. For example: "The lease expires in February 2027. The vendor has obtained written confirmation from the landlord that they will support a lease renewal or new lease for a qualified incoming tenant on commercially reasonable terms. A copy of this correspondence is available in the data room."
Commercial Property Sales: Using an IM as a Marketing Document
For the sale of commercial investment property — office buildings, retail centres, industrial facilities — a formal Information Memorandum is also used as a marketing document for private treaty or expression of interest campaigns. This type of IM is more property-focused than a business sale IM: it emphasises the land title, the building specifications, the tenancy schedule (tenants, lease terms, passing rent, WALE), the property's financial performance (net income, cap rate), and the capital expenditure history.
MemorandumMaker is specifically designed for business sale transactions — where the value lies in the business, its customers, team, and goodwill — rather than pure commercial property marketing documents. For a business with a significant property component (e.g., a food manufacturing business that owns its factory), MemorandumMaker covers the property as part of the operations and assets sections, with the business goodwill as the primary value driver.