When business owners become real estate investors

It happens more often than you’d think.

A business owner sells their company — but retains the building.

An entrepreneur has a liquidity event and starts looking to diversify.

An operator retires from one business, only to find themselves exploring commercial real estate investment in their next chapter.

Suddenly, you’re a real estate investor.

But you’re not an expert. Not really. You’ve built your wealth doing something else — and now you’re stepping into a space that’s capital-intensive, deadline-driven, and full of nuance.

So what now?

This is a common story in Chicago-area commercial real estate, where a strong network of privately held and family-owned businesses has long been a backbone of the economy. As these business owners exit or evolve, real estate becomes a natural next move. But it's a move with real financial implications.

A different kind of investor

These first-time real estate investors share many similarities with professional real estate firms and developers. They often come in with strong financial fundamentals, a deep understanding of operations, and a healthy appetite for risk — but they may lack familiarity with the nuanced rhythms and structures of the real estate world. Terms like “bridge-to-perm,” “retrade,” or “bad boy carve-out” can feel like a new language.

And unlike institutional investors, these individuals tend to make deeply personal decisions. They might be buying a building to house a second-generation business, repurposing a site in a neighborhood they know well, or adding stable income to a retirement strategy. Real estate isn’t a product — it’s part of their next identity.

What’s needed — and what’s often missing

For these newly minted real estate investors, access to capital is only part of the equation. More often, what they need most is guidance:

• How should the deal be structured?

• What’s the right debt-to-equity mix?

• What timelines are realistic?

• What are the risk signals they need to look for?

Many of these investors are used to moving fast in industries they know inside and out. Stepping into real estate means adjusting to different processes, new stakeholder groups, and often, a whole new sense of what “risk” means in a transaction.

The geography shift

It’s not just the profile of investors that’s shifting, it’s the geography of investment, too. In Illinois, rising property taxes and local economic uncertainty have led many Chicago region-based investors to pursue opportunities in other markets. These investors bring their expertise to those local markets. But as unknown entities without a local track record, this can create difficulty when seeking capital from local institutions.

Many end up looking for lenders who know them personally, even if they don’t know the target market. In these cases, trust is the constant — and market knowledge becomes a variable that can be quickly learned.

Real estate as second act

For many business owners, stepping into real estate isn’t about maximizing internal rate of return or building a portfolio. It’s about applying the same instincts that made them successful in business: finding value, managing risk, and making bold but informed decisions.

In that way, real estate often becomes a natural next step — not just a financial investment, but a practical extension of the skills that built a successful business in the first place. And with the right support and perspective, it can become a profitable part of the next chapter.

• Steven M. Vernon III is senior vice president/group head of commercial real estate at Signature Bank.