{"ok":true,"canonical_url":"https://dealroom.so/glossary/real-estate-entity","api_url":"https://dealroom.so/api/public/glossary/real-estate-entity","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"real-estate-entity","term":"Real estate entity","aka":"PropCo","group":"People and paperwork","definition":"This is a separate company, often owned by the seller, that holds the business's real estate. It's crucial to understand if you're buying just the business or also the property, or if you'll need a new lease.","what_it_means":"Often, a seller's operating business leases its premises from a related real estate entity. If you're not buying the real estate, you'll need a new long-term lease with fair market rent. Ensure the real estate entity agrees to a Landlord Subordination Agreement, which is often required by SBA lenders.","url":"https://dealroom.so/glossary/real-estate-entity","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"lease-agreement","term":"Lease agreement","url":"https://dealroom.so/glossary/lease-agreement"},{"slug":"long-term-lease","term":"Long-term lease","url":"https://dealroom.so/glossary/long-term-lease"},{"slug":"landlord-subordination-agreement","term":"Landlord subordination agreement","url":"https://dealroom.so/glossary/landlord-subordination-agreement"},{"slug":"fair-market-rent","term":"Fair market rent","url":"https://dealroom.so/glossary/fair-market-rent"}],"related_questions":[{"question":"What if the real estate for the business is owned by a separate entity controlled by the seller?","url":"https://dealroom.so/sba-7a/questions/what-if-the-real-estate-for-the-business-is-owned-by-a-separate-entity-controlled-by-the-s"},{"question":"What happens if the business real estate is held in a separate entity owned by the buyer, not the operating company?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-the-business-real-estate-is-held-in-a-separate-entity-owned-by-the-buyer-n"},{"question":"If the business real estate is in a separate entity, what documentation is needed to link it to the operating company?","url":"https://dealroom.so/sba-7a/questions/if-the-business-real-estate-is-in-a-separate-entity-what-documentation-is-needed-to-link-i"},{"question":"If the business real estate is held in a separate entity by the seller, can the SBA loan still finance it?","url":"https://dealroom.so/sba-7a/questions/if-the-business-real-estate-is-held-in-a-separate-entity-by-the-seller-can-the-sba-loan-st"},{"question":"If the business real estate is owned by a separate entity controlled by the seller, how is the lease handled for SBA purposes?","url":"https://dealroom.so/sba-7a/questions/if-the-business-real-estate-is-owned-by-a-separate-entity-controlled-by-the-seller-how-is-"},{"question":"What is the difference in repayment terms between real estate and non-real estate loans?","url":"https://dealroom.so/sba-loans/basics/what-is-the-difference-in-repayment-terms-between-real-estate-and-non-real-estate-loans"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Real estate entity","url":"https://dealroom.so/glossary/real-estate-entity","source_type":"DealRoom Data"}}