When does a prepayment actually make sense?
A prepayment or buyout makes sense when the guaranteed lump sum outweighs long-term lease risk and aligns with your financial goals. It is not automatically good or bad… it depends on math, timing, and your priorities.
Buyouts convert future rent into guaranteed cash today. That can be powerful. It can also be undervalued.
Prepayments often make sense when:
• You want guaranteed capital for a project.
• You want to eliminate long-term tenant risk.
• Your board prefers certainty over variable income.
• The offer reflects strong market value.
But here’s the issue: many buyout firms discount future income heavily. They count on landlords not understanding net present value or future rent escalations.
We benchmark buyout offers against market comps and often play multiple buyers against each other. Our clients frequently secure 10–25% more than the original offer.
The key question is not “Is this fast cash attractive?”
It is “Does this payout reflect the true value of 20+ years of income?”
We walk you through side-by-side comparisons:
• Keep the lease
• Negotiate stronger terms
• Accept buyout
• Counter for higher buyout
The right answer depends on your mission, timeline, and financial needs.
A prepayment should feel strategic… not rushed.