Eleven Rental Spaces Sold One by One for ¥60.5M Total — What Earned "Two to Three Times the Going Rate" Was the Know-How, Not the Property

When an individual sells a small business, the price tends to be dragged toward the cost of the property and fixtures. A 20-square-meter apartment room with mirrors on the wall and a smart lock on the door does not normally justify a price in the millions of yen.

Yet in a seller interview published by the Japanese M&A marketplace TRANBI in December 2023, rental space operator Mitsu says this: he has sold 11 rental spaces to date for a cumulative ¥60.5 million. “They weren’t large, most were rooms of about 20 square meters”, and yet “every one of them sold for two to three times the going rate.” His most recent deal was a 30-square-meter party room seating 25 people, transferred for ¥12 million.

What makes the interview interesting is that Mitsu articulates the reason for the premium with no varnish on it. His own sense of the transaction, he says, is that “rather than selling a rental space, I’m selling the system and know-how for producing several million yen of annual profit from a rental space.” That self-assessment is itself the explanation for the price gap.

Career and figures in sequence

Why “two to three times the going rate” held

Mitsu’s explanation is direct. Prospective buyers do not know who he is when they first make contact. But once he conveys his experience and record in a meeting and they look at the content he publishes, they say they want to buy. In other words, trust is not established by a pre-existing brand but proven in the meeting itself, through the published work.

The contrast he draws is the sentence that appears in so many other rental space listings: “We currently acquire customers through booking portals. There’s room to grow revenue considerably if you put effort into direct acquisition.” That reads as an upside pitch, but it is also a confession that the seller does not know how to capture that upside. From the buyer’s side, what transfers is the property and the current bookings; the method of improvement has to be invented from scratch.

Mitsu has the method. The operating fact that 80% of his bookings come through his own site is precisely the difference from portal-dependent listings, and it is substance he can hand over at transfer. Low dependence on fee-charging external platforms is a profitability story and, at the same time, an inventory of things he can teach at the point of sale. On going rates in the hourly-rental market, a published record of four rental spaces producing ¥360,000 in monthly profit puts platform fees at 30–35%. The technique for getting outside that fee structure is what rode straight into the sale price.

Building the “sellable state” before selling

The other crux is timing design. Most people who sell a rental space, Mitsu says, are in the mindset of “it didn’t work out, so I want out as fast as possible.” He does the opposite: he holds the space until revenue is stable, then puts it on the market at the point where success lets it fetch a premium.

And he puts it bluntly, “Frankly, the thing you want to get rid of is not going to sell high.”

He understands the impulse to offload a loss-making location for a few hundred thousand yen, but unless the buyer has serious operating skill, that buyer will end up suffering the same losses and wanting out, “a vicious cycle like a game of old maid.” Which is why he repeats that sellers should not hide unfavorable information. More than the ¥60.5 million headline, this sequencing (make it profitable, then list it) is closer to the reproducible part. The recent ¥12 million deal came right after the space posted first-month profitability and a month with revenue over ¥1 million.

How the spaces themselves were designed

The operating side that underwrites those prices is spelled out too.

He avoids vague concepts like “suitable for many purposes,” specializing instead in dance lessons and rental salon use. Mirrors on the wall and a wooden floor make it a dance space. A massage bed makes it usable by freelance therapists without premises of their own. Party-room use, he notes, supports higher hourly rates but is harder to build repeat business on, requiring constant new-customer acquisition, and it swings seasonally. December is peak season, with slack periods elsewhere.

On location, he does not open in regional areas, and will deliberately open in areas where portal searches show heavy competition. Many entrants, the reasoning goes, is the flip side of demonstrable demand.

And his criterion for expansion rather than retreat is precise. Once booking slots are consistently 70–80% full, he moves on to launching the next space. Filling 90–100% is extremely difficult, and launching a new location has better returns than grinding to raise occupancy further. That judgment, expanding sideways rather than perfecting a single location, is what simultaneously produced a peak of 13 locations and a continuous supply of sellable inventory.

What didn’t work, and what it cost

Reading this as a success story loses the important half. The first part of the interview is a chain of failures.

Just after starting out, thinking one location alone would not grow revenue, he looked at other businesses and met a large number of people to build a network, and along that path was defrauded three times. ¥3 million absconded with, a ¥3.5 million consumer-lending scheme, and a smartphone resale scheme where, because he introduced friends and family, total losses among people around him reached roughly ¥40 million. When he went to the police, he was told the case could not proceed unless he turned himself in as a perpetrator. He did so and was questioned (he was ultimately not arrested).

The coworking space he opened on a ¥5 million loan had zero visitors on both its first and second days and closed two days after opening. After describing sitting alone in an 80-square-meter space with ¥250,000 monthly rent, he says he was diagnosed with depression.

His own summary: “Because my attitude was to meet as many people as possible and hope to earn by riding on someone else, everything failed.” What didn’t work was not a business tactic but a mode of funding and expansion that depended on other people. That the recovery began with nine months shut in at home writing 200 articles, work that is radically solitary, is the mirror image of that reflection. Even in this sector, as the record of two spaces run for 29 months and abandoned at a loss shows, opening the doors does not make it work.

What generalizes, and what doesn’t

The rule that outlives this particular business is the pricing structure: sale value is determined by the volume of transferable know-how, not by assets. What the buyer is actually purchasing is a state they can run themselves from next month, and if the seller can put the procedure for reaching that state into words, the price rises. That applies well beyond rental spaces, to much of individual M&A whether brick-and-mortar or online. The explicit 70–80% occupancy line for moving on also travels across sectors.

Three conditions, though, are hard to reproduce. Mitsu’s know-how publishing rests on 200 blog articles and a subsequent social and YouTube presence, with a third party’s coverage accelerating the spread. Without that track record as a publisher, the persuasiveness in a meeting does not exist. Eligibility is a second constraint: only spaces he made profitable qualify for this method, and loss-making locations cannot be sold high this way, as he says outright. The funding side is the third: he built publishing and consulting into revenue pillars and used those profits to launch new spaces. The capital for continuously creating sellable inventory was supplied from outside the rental business, and that has to be read separately from the reproducibility of the rental business itself.

The limits of the numbers should be stated as well. ¥60.5 million is the cumulative transfer value of 11 locations. The per-location average is about ¥5.5 million. Launch costs, the profit and loss during operation, and transfer expenses are not disclosed, so no margin or payback period can be calculated from this case. That securing a property is the first hurdle is common to another operator’s record, which began with negotiating for sublease-permitted premises, better not to misjudge the difficulty of the entrance by looking only at published exit figures.