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The Lease is Often Overlooked

 
So now you have decided its time to sell your medical/dental practice. You have built the business for a long period of time and its time to move onto greener pastures. In most cases the practice broker and accountant and lender focus on tax returns, P and L statements and balance sheets. All of this is valuable information but often times the lease agreement can be the difference in selling or not selling your business.
 
As you have established business  in a particular location chances are the buyer wants to stay in that location. If the lease has a lot of time remaining this can be done with a lease assignment. But do you have the right to assign your lease ? If not, the landlord may be able to prevent you from selling your business. Or, is the current lease a “fair “ deal. Is the rate a market rent for that area? If not, you may or may not be able to negotiate a better deal. Finally, does the selling doctor remain liable on the lease agreement? If he/she wants to retire to Florida staying on as a lease guarantor may not be a good model. These questions and others can be answered at no charge by a commercial lease expert. 
 
When you are contemplating selling your business contact HPRG Transitions to get these questions and others answered. 
 
Charles Feitel can be reached at  301 365 6940 at cfeitel@hprgrealty.com

Choosing the Best Medical Office Space For Your Practice

Office Lobby

Real Estate, ITS AN EMOTIONAL DECISION 

 
 
When you decide its time to sell your business often times the buyer becomes very important to you. It only makes sense. For your entire lifetime you have built this business, which has supported you and your family and caused you great joys over  an adult lifetime.  Many times you have staff members who are part of the team and been with you many, many years. It is important to you that your patients and staff continue to have a good medical/dental experience even when you are long gone. This is where the dilemma often occurs between selling to a corporate buyer or an individual. In general, corporate buyers are more concerned about the bottom line and will often pay more for your business. However, often times they require you to stay on board for up to three years after closing as an employee running the business. Also certain practices are better targets for corporate buyers based on a myriad of circumstances. In general larger, more visible offices appeal to DSO’s and MSO’s but not always. In sum, its always  about the “bottom line”.
 
So if you are thinking about selling your practice let us help you evaluate who might be the best buyer. Although we do not have a “crystal ball”, experience goes a long way in setting up a plan for the upcoming future. Current market conditions play a big role in finding the best buyer. Trends in dentistry and medicine will often dictate your best path to follow. Also, when placing a value on the medical office space, corporate and individual buyers use a different accounting method. While corporate buyers evaluate multipliers and EBITA , individuals use % of gross revenue calculations. 
 
Here at HPRG we can provide you a “free” analysis to figure out which direction you should proceed. We know this business is your “baby” and we share your emotion in the ultimate sales process.
 
Feel free to reach out to Charles Feitel at (301) 365-6940 or cfeitel@hprgrealty.com.
 

Real Estate and Selling My Medical or Dental Practice

Large office building.

Don’t overlook your real estate when selling your practice. The location and look and feel of your office is a vital part of your practice success. You may be in an office building and a lot of new young  dentists want a storefront location. You may want to lease the condo you own but the new young buyer may want to buy your space for the same reason you did years ago. The lease or the ownership position you maintain  can greatly affect the viability and value of your office. Banks require long term leases to finance transitions and buyers want to have a “market” lease. If the buyer buys the building he is only going to pay market value. As a Practice owner if you own the real estate will you have capital gains implications if you sell the building? If you assign the lease agreement are you still legally on the hook in the event of a default? Some practice brokers will claim they can help with the leasing or sale of the real estate in addition to the sale of the business. Be careful here. Practice brokers are not licensed real late brokers and should not be engaged in the real estate business legally. Moreover  they do not have the requisite experience or knowledge to handle your real estate situation. I have seen practice brokers try to juggle values of real estate and offices to “make the deal”. The problem is that the business and real estate are valued different by the bank. The practice is based on gross revenues or EBITA but the real estate is valued on comps and CAP rates. So “mixing” the two is often a recipe for disaster at the goal line of the deal. We recommend a transition expert to sell the business and  a real estate expert to sell or lease the real estate.

These are just a few questions you need to be aware of when getting ready to sell your practice.

For a complimentary assessment of your individual situation call Charles Feitel at 301.365.6940 or email me at cfeitel@hprgrealty.com

Selling My Dental Practice During A Pandemic

endodontics procedure

Is the middle of a pandemic a good time to market your dental or medical practice for sale?

 

The short answer is …..    maybe.

  • If you are a mature dentist or doctor are you concerned about being exposed to the virus?
  • How much longer were you going to work in your plans pre-pandemic?
  • Has your staffing been under control or has it been stressful?
  • What has your office performance been since re-opening?
  • In theory, the virus may have pushed values downward but interest rates for buying dentists are at an all time low!
  • Are you willing to work in the “new normal”?

If you are struggling to answer any of these questions or have definitively answered some of them, then it may be time to take action! Whether it be retirement, expansion, or shrinking your practice there is always a solution to help get you what you desire. If you are interested in selling your practice then learning the proper steps to take prior to jumping ship is something you may want to do. Especially during these uncertain times with Covid-19 still at our doorstep.

For a free consultation to see if NOW is a good time, call HPRG, THE Medical and Dental Transitions Group!

Our unique sales approach makes us the wise choice for selling your practice. 24 years experience is what it takes to insure you have the most successful transition experience.

Call Charles Feitel at 301.365.6940 or email him at cfeitel@hprgrealty.com

Visit www.hprgrealty.com to see our current available listings