Here is a guest blog from Ellen Dorner, Managing Director of Dental Practice Sales
Dr. A is a 62 year-old GP that is in the process of
transitioning out of his practice. Dr. A
owns his own building in a small office park with good parking, good visibility
and in a very stable area.
When Dr. A decided he was ready to transition out of
practice, he also decided that he would sell the building at the same
time. With all the good things about his
building location, the sale has not gone as easily as he thought it would. He has had several interested buyers for his
practice, all of which are young dentists just starting out. And while they would love to eventually own
their own building, the decision to do so now has been a difficult one. With @ $200,000 in school loans still outstanding,
the additional cost of a building purchase along with the practice has become
too daunting.
This seems to be the situation with many dentists who own their
real estate. The buildings were
purchased with the notion that real estate always goes up and is a great
investment. And while commercial real
estate has taken a hit over the last few years, the decision to own was not
necessarily a bad one at the time. The
glitch is that in transitioning a practice with the real estate to a young
dentist just starting out is proving to be too much for them to handle at this
point in their career.
A better idea may be to lease the building with an option to
buy the real estate at a later date. The
critical piece to this situation is to be sure that all terms are in the lease
– who will value the real estate, the terms of the eventual purchase and the
timing of the purchase.
As in any part of the transition, it is critical to have
trusted advisors to walk you through this process. You are the dental expert, don’t hesitate to
rely on other experts for this important transition in your life.
To discuss your situation, email Ellen or call her at (800) 772-1065.
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