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EXIT STRATEGIES

Business for Sale: Historic Southwestern 'Events House'

An overview of a wedding-and-banquet hall offered for sale. Includes the price, how the business was valued, the outlook of future sales, and the pros and cons of the purchase.
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The Business: Do visions of June brides dance like dollar signs in your entrepreneurial head? If you're willing to say "I do" (or at least "Why not?") to running one of Tucson's glitzier wedding-and-banquet halls, then stroll down this aisle. Located in the city's historic downtown arts district, the business consists of two completely renovated facilities: an oversized 1901 town house (once a boarding house for railroad workers), and a courtyard of 4,000 square feet bordered by vine-covered walls, as well as living quarters for new owners or a manager. The current owners host about 90 events each year, mainly around the Christmas holiday season and the peak bridal months of March through June; for each event, they receive a minimum fee of $1,500 (which provides entry to 100 guests but excludes food, drink, and extras such as service personnel and live music). The owners need to relocate to care for aging parents, which is why they're ready to toss the bouquet (as well as all those tables, chairs, and party linens) to new owners.

Price: $795,000 (Owner financing possible with $300,000 down payment)

Outlook: With Tucson's vibrant commercial climate and booming downtown real estate market, this "events house" stands a better chance of success than many of the weddings it hosts, as long as its buyer pursues aggressive growth. (What better way to kill one's ardor, after all, than by staying at the business's current 25%-of-capacity level?) Still, boosting revenues should be quite simple, given the site's drop-dead elegance and proximity to the city's commercial center. Just make a vow to launch an advertising campaign aimed at wooing year-round business-oriented events. (The owners now rely on local bridal ads and recommendations from their 10,000 or so guests each year.) Or set up an in-house catering division instead of leasing operations to an outside service, which is the current arrangement. (But be prepared: you'll have to invest in commercial-kitchen equipment, since the prevailing setup belongs to the lessee.)

Price Rationale: Without food-and-drink revenues to add to your party mix, this is a pure real estate play. So value this business according to Tucson's current downtown residential price range, $75 to $125 per square foot. With the living facilities and the main house adding up to 5,650 square feet, that suggests a fair-market range of $424,000 to $706,000; given the quality of the site's renovation and the huge size of its courtyard, buyers will probably wind up at the high end.

Pros: A great property and local name recognition add up to a marriage made in heaven.

Cons: If you can't attract more customers, this honeymoon could be over quickly. --Jill Andresky Fraser

Gross Revenues Recast Earnings*
1995 $85,918 $31,567
1996 $105,054 $51,724
1997 $132,718 $77,094
*Before interest, taxes, depreciation, and owner's compensation.

Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Candace VerBrugghen at 520-623-9123.

Last updated: Jun 1, 1998




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