Preparing for a Successful Exit: Key Strategies for Real Estate Business Owners

At a glance: 

• The main takeaway: As opportunities arise in the M&A market, more real estate business owners are exploring sale opportunities and thinking about their exit strategy.
• Impact on your business: Even if you’re years away from a transaction, it’s essential to create your exit planning strategy now so you can position your business to act quickly when opportunity knocks.
• Action steps: Whether you’re looking to bring in a growth partner, reduce risk through recapitalization, or pursue a full exit, Aprio is here to help you plan your next chapter.

As dynamics shift in the real estate market and opportunities for mergers and acquisitions (M&A) grow, more real estate business owners are beginning to consider what a successful exit strategy could look like. Whether you’re contemplating a full sale, seeking a growth partner, or preparing for a future transaction, a thoughtful and strategic approach to exit planning can help you maximize value and position your real estate company for long-term success.

In a recent Aprio webcast, Bill Dupee, leader of Aprio’s Transaction Advisory Services practice, and Sandi Buttram, a tax partner in Aprio’s Real Estate group, explored how real estate companies can prepare for financial due diligence and navigate current M&A trends while preparing for a future exit. We have recapped their discussion, best practices, and guidance below.

The market: Real estate M&A is heating up

M&A activity in the real estate sector is gaining momentum, driven by stabilizing interest rates and improving financing conditions. The data shows that investors are particularly interested in real estate service-oriented businesses, especially those that demonstrate:

• Recurring revenue
• Geographic and tenant diversification
• Operational efficiency and digital enablement
• Scalability and healthy margins

The market is especially favorable for operating real estate companies, such as property management firms and real estate technology platforms. Often investors see these businesses as ripe for consolidation due to their fragmentation, which creates opportunities for capital infusion and strategic partnerships.

What drives value in real estate transactions?

When assessing a real estate business, investors look at several key factors that can significantly impact valuation:

• Recurring versus reoccurring revenue: Investors are typically attracted to businesses with predictable, contract-backed revenue streams.
• Geographic reach: Diversified footprints tend to command stronger multiples.
• Operational structure: Investors set their sights on businesses that are tech-enabled, asset-light, and vertically integrated because they typically receive higher valuations.
• Demographic and industry alignment: Real estate companies that serve growing segments — such as senior housing, healthcare, and logistics — are especially appealing to investors.

Creating value through strategy

During the webcast, Bill explained that real estate business owners who integrate technology and focus on strategic growth are best positioned for a premium valuation. There are several value creation strategies owners can deploy:

• Technology integration: From smart thermostats in multifamily housing to PropTech SaaS platforms, technology can help businesses improve scalability and operational efficiency.
• Portfolio optimization: Business owners should focus on diversifying their investment portfolios across core, high-yield assets while divesting underperforming or non-core assets.
• Vertical integration: By combining property management, development, and leasing functions, businesses can improve service delivery and strengthen margins.
• Revenue diversification: Businesses that serve multiple end markets and demographics can reduce risk and improve revenue predictability.

Financial due diligence: Your story in numbers

Financial due diligence is one of the most critical steps businesses take in preparing for a transaction (we commonly refer to this as a Quality of Earnings, or QoE analysis). QoE analyses require business owners to compile and analyze three years of financial data to create a compelling and accurate financial narrative for potential buyers and investors. 

A QoE report typically includes:

• Normalized EBITDA and cash flow analysis
• Working capital requirements
• Revenue quality assessments
• Supporting documentation (e.g., lease agreements, payroll records, rent rolls)

Keep in mind that due diligence isn’t just about risk mitigation — it’s about articulating the value you’ve built in your business and supporting it with data.

Building your exit planning deal team

Even if you’re not planning to sell your real estate business immediately, it’s important to have a trusted team that can help you prepare for future opportunities. Your core group of advisors should include:

• Accounting and tax advisors to support your QoE analysis, tax structuring, and compliance
• M&A attorney to help facilitate deal execution
• Wealth advisor to help you understand your post-sale goals and financial needs
• Investment banker who can help you find the right buyer and maximize value 

Each of these professionals will play a vital role in helping you understand your options and navigate the complexities of the transaction process. Remember that exit planning isn’t just about preparing to sell; it’s about creating options for your future. Even if you’re years away from a transaction, it’s essential to create your exit planning strategy today so you can position your business to act quickly when opportunity knocks.

Whether you’re looking to bring in a growth partner, reduce risk through recapitalization, or pursue a full exit, Aprio’s team is here to help you plan your next chapter.

Contact us today to start a conversation.

Related Resources 

• Learn about Aprio’s Real Estate Services 
• Explore Aprio’s Transaction Advisory Services
• Estate Planning and Asset Protection Strategies for Real Estate Professionals and Investors in 2025