Dental Office Sale Leaseback
Ever wonder how your dental office could benefit from a sale leaseback? If you operate a dental office and you also own the real estate, then a sale leaseback could be a great option when you’re ready to raise capital for business growth, to pay down debt, or to sell your real estate due to a business sale.
We help dentists unlock their real estate equity.
Advantages of a Sale Leaseback for Dentists
If you operate a dental office that also owns real estate assets, there are many great advantages to pursuing a sale leaseback transaction. There are some disadvantages too, so it’s important to be clear on what your business goals are, and these goals should help determine whether a sale leaseback is right for you.
Benefits of a sale leaseback for the lessee/seller
- You could quickly unlock any equity that’s “stored” in your real estate to help grow your dental office faster.
- You decrease your overall operational risk when you no longer own the dental office real estate and that risk now sits with the new owner.
- You can improve the health of your business balance sheet by trading your mortgage (liability) for an asset (cash).
Benefits of a sale leaseback for the lessor/buyer
- They get a lease that is guaranteed by your operating business
- They get a consistent and predictable stream of income for a long period of time
- They get a fair return on their invested capital
As you can see from these benefits, a sale leaseback can be a truly win-win scenario for both you, the dental office owner, and the buyer/investor alike. While there are many details that both parties need to agree on, such as the lease length, monthly payments, etc, the sale leaseback transaction provides many advantages and is a useful tool you should consider if you are looking to raise capital quickly for your dental office.
Dental Office Sale Leaseback Examples
While there are many dental office sale leaseback examples, here are a couple that should give you a clearer picture of why might choose to do a sale leaseback for your dental office real estate.
Example 1: Dental Office Expansion
Christina and Brian own two locations of a popular regional dental franchise in Oregon. They were offered an opportunity to purchase more franchised locations nearby. They researched what it would take to finance the purchase of the new locations and realized that they would be able to purchase both locations without financing if they raised capital by selling the real estate from their two current fast food locations in a sale leaseback transaction. This would free up the capital they had built up over the years. This allowed them to purchase the new locations without taking on much new debt and actually improved their balance sheet in the process. They removed mortgage debt and increased their assets all at once. They came to an agreement with an investor and sold their dental office real estate and immediately signed a 15 year lease to remain and continue to operate in the first two locations.
Example 2: Dental Office Sale
Mark is a successful dentist in Kansas who has operated his dental office for over 30 years and is preparing to retire. He was planning on selling the business to one of the dentists in his office who expressed interest in taking over. Mark now owns the dental office real estate free and clear, but the new dentist was only interested in buying the business, not the real estate. Mark found an investor who was willing to purchase and leaseback the real estate longterm for a fair rate to the new dentist that was buying the office. Because of the sale leaseback, Mark was able to realize the equity in his real estate and successfully sell his business to his colleague.
Hopefully, these two examples give you a better picture why you might consider a sale leaseback to unlock your dental office real estate equity.
While there are plenty of commercial real estate brokers who would offer to help when you are ready to think through a dental office sale leaseback for your dental office real estate, there are actually few companies that specialize in the sale leaseback process. These select companies, like SaleLeaseback.co work directly with dental office operators to buy real estate directly from you, the owner, with zero fees and a quick process. We help you think through your options and potential pitfalls associated with a sale leaseback transaction for your particular situation. So, if you are considering a sale leaseback to raise funds for your business expansion or debt pay-down, start by letting us give you a free offer for your real estate.