KMF Business Advisors

Dental Practice Real Estate: Sell or Lease in Florida?

When a dentist owns the office property, selling the practice creates a separate real estate decision. The owner may sell the property with or alongside the practice, retain it and lease it to the buyer, or sell it to another investor while arranging continued occupancy for the practice.

No option is automatically better. Compare net proceeds, future income, liquidity, landlord responsibility, tenant concentration, financing, lease risk, control of the premises, taxes and estate-planning goals. The dental practice and the real estate should be valued and negotiated separately, even when they close together.

KMF Business Advisors can discuss how the property decision fits within selling a dental practice in Florida and identify the issues to review with a licensed appraiser, lender, attorney and tax adviser.

Separate the Dental Practice from the Real Estate

The dental practice is an operating business. Its analysis can include earnings, patient and referral continuity, providers, staff, equipment, systems, contracts and transferable goodwill. The real estate is a separate asset with its own ownership, market, condition, zoning, title, financing and appraisal.

The American Dental Association advises owners to remember that a dental practice is valued separately from its real estate and that the property may involve different lender terms. A combined offer should therefore show how much consideration applies to the practice, how much applies to the property and which conditions apply to each closing.

This separation helps prevent several problems:

A strong property value should not disguise weak practice economics, or the reverse.
Related-party rent should be identified when practice earnings are analyzed.
Equipment, dental fixtures, leasehold improvements and building components should not be counted twice.
The owner can evaluate whether the practice buyer can or wants to acquire both assets.
The parties can coordinate closing without assuming that both transactions have the same financing, appraisal or diligence requirements.

Review business valuation options for general practice-valuation concepts. Use a qualified commercial real estate appraiser for an appraisal when the lender, parties or engagement requires one.

Three Common Real Estate Paths

No path is automatically better. Compare net proceeds, after-tax cash flow, risk, control, liquidity, financing, lease obligations and estate-planning goals using the actual property and proposed transaction.

1. Sell the Property with or Alongside the Practice

Selling both may provide liquidity and reduce the seller's continuing responsibilities. It can give the practice buyer long-term control of the location. The buyer must be willing and able to finance both assets, and the property still requires separate valuation, title, physical and other diligence.

The practice and real estate transactions may close simultaneously, but each should have defined prices, documents and conditions. The agreements should address what happens if one transaction is ready and the other is not.

2. Retain the Property and Lease It to the Practice Buyer

Retaining the building may provide rental income and continued participation in the property's future. It also turns the seller into a landlord whose return depends heavily on one tenant operating a dental practice at that location.

A durable, market-based lease should define rent, expenses, repairs, improvements, assignment, options, guarantees, defaults and property access. The owner should evaluate vacancy risk, capital needs, management responsibility, debt, insurance and the consequences if the practice tenant later sells, relocates or closes.

3. Sell the Property Separately and Arrange Continued Occupancy

The owner may sell the real estate to another investor while the practice remains as tenant. When a property owner sells and leases back the premises, the transaction is often described as a sale-leaseback.

This path can create liquidity while preserving occupancy, but the lease becomes a central asset and obligation for the practice. Purchase price, rent, lease term, options, escalations, guarantees and exit rights should be evaluated together. Legal and tax advisers should review whether the transaction works as intended.

Compare Selling and Retaining the Property

The right choice depends on the owner's goals, property economics, proposed lease, financing and transaction-specific risks. Use this comparison as a starting point for professional review rather than as a recommendation for every transaction.

Dental office property sale versus retained ownership
Decision Area	Sell the Property	Retain and Lease the Property
Liquidity	Converts property equity into closing proceeds, subject to debt, expenses and taxes.	Keeps equity invested and generally produces cash over time rather than a full property payout.
Future Income	No future rent from the property after sale unless another arrangement applies.	May provide rental income, subject to vacancy, expenses, debt and tenant performance.
Management	Can end most owner responsibilities after closing, subject to surviving obligations.	Requires landlord administration, maintenance decisions and enforcement of the lease.
Concentration and Risk	Reduces continued exposure to one property and tenant after closing.	Concentrates part of the seller's wealth and income in the practice location and buyer-tenant.
Buyer Pool and Financing	Buyer must want or finance the property, or a separate property buyer must be coordinated.	Practice buyer needs an acceptable lease; lender may review occupancy terms and landlord provisions.
Timing	Property diligence and financing can affect the combined closing schedule.	Lease terms and required consents must be settled before or with the practice transaction.
Control of Premises	Passes to the property buyer under the documents.	Owner retains property control subject to the tenant's lease rights.
Valuation	Requires a property valuation or appraisal separate from the practice.	Requires support for market rent and may still require a property valuation for planning or financing.
Tax and Estate Effects	Sale can create current tax and reinvestment questions.	Rental activity, depreciation, future sale and estate planning remain relevant.
Exit	Can provide a cleaner separation from the site.	Creates a continuing landlord and tenant relationship after the practice sale.

Compare realistic after-tax cash flows and risks rather than gross sale price with gross rent. A tax adviser can model the owner's basis, debt, depreciation, transaction costs, rent, expenses and timing. The future value and occupancy of the property are not guaranteed.

Lease Terms That Affect a Dental Practice Sale

Whether the seller already leases the office or will become the buyer's landlord, the lease can affect continuity and financing. Review the actual language early.

Premises and Permitted Use

Confirm the space, legal description, storage, parking and access included. The permitted-use clause should support the intended dental operations and any lawful related services. Review exclusivity, signage, hours, utilities and restrictions that could affect the practice.

Term and Renewal Options

The initial term and enforceable options should provide enough occupancy certainty for the buyer's plan and financing. Longer is not always better; obligations, rent changes and flexibility also matter. The buyer and lender should review the complete option mechanics and notice dates.

Rent and Occupancy Costs

Identify base rent, escalation method, operating expenses, property taxes, insurance, utilities and other charges. Clarify whether the lease is gross, modified gross, triple net or another structure based on its actual provisions. In a related-party lease, valuation and lender analyses may normalize rent to a supported market level.

Repairs, Improvements and Dental Fixtures

Allocate responsibility for structural items, roof, HVAC, plumbing, electrical capacity, equipment connections, maintenance and capital replacement. Identify who owns leasehold improvements and dental fixtures, who may remove them and what restoration is required at the end of the term.

A practice transaction may trigger assignment or change-of-control provisions. Confirm whether consent is required, when it must be requested, what information the landlord may review and whether the current tenant or guarantor remains liable. Do not assume a lease transfers with the practice.

Default, Guarantees and Lender Protections

Review deposits, personal or entity guarantees, default and cure rights, termination, holdover, casualty and condemnation. A lender may request notice and cure rights, collateral access or other provisions. Requirements vary by lender and transaction.

Dental Office Lease Review Checklist

Parties, premises and legal description.
Permitted dental use and any exclusivity protections.
Initial term and renewal options.
Base rent, escalations, operating expenses, taxes, insurance and utilities.
Maintenance, repair, capital replacement and building-system responsibilities.
Improvements, dental equipment, fixtures and restoration obligations.
Assignment, change-of-control, sublease and landlord-consent provisions.
Lender notice, cure and collateral-access provisions when requested.
Personal or entity guarantees, deposits and other security.
Default, cure, termination and holdover provisions.
Casualty, condemnation and business-interruption rights.
Parking, signage, access, utilities, accessibility and after-hours use.

A Florida real estate attorney should draft or review the lease and related consents. A broker or general guide cannot determine the legal effect of the documents.

Property Valuation, Rent and Practice Valuation

The property may be appraised using methods and comparable evidence appropriate to commercial real estate. The practice may be valued using income, market and asset approaches appropriate to an operating dental business. One conclusion should not substitute for the other.

Occupancy cost connects the analyses. Practice earnings may need an adjustment when the practice pays an owner-controlled entity rent that is above or below supported market rent. Any adjustment should be based on evidence and applied consistently. The property analysis should likewise use the actual lease or a supportable market-rent assumption.

Define which items belong to the practice and which belong to the building. Dental chairs, imaging systems, cabinetry, plumbing, leasehold improvements, trade fixtures and building systems may be treated differently by contracts, appraisers, lenders and tax advisers. Use an inventory and photographs, then reconcile them to the purchase agreement, lease and appraisal.

Premises continuity can also affect dental practice goodwill . A known location and workable occupancy rights may support continuity, while uncertainty about relocation can create cost and transition risk. That relationship does not mean the property value should be included in goodwill.

For the operating business itself, see dental practice valuation in Florida .

Financing and Closing Coordination

A practice buyer may finance the operating business, the real estate or both. The lender may review practice cash flow, property appraisal, environmental or physical information, title, insurance, lease terms and borrower eligibility. The lender's requirements should be obtained early rather than assumed.

The SBA states that its 504 program can finance qualifying major fixed assets such as land and existing buildings for eligible operating businesses. The program does not finance speculation or investment in rental real estate. Eligibility, occupancy and structure must be confirmed with the Certified Development Company and lender for the actual transaction.

Joint Closing Coordination Checklist

Practice and property purchase agreements.
Financing approvals and appraisal conditions.
Title, survey and permitted exceptions.
Lease, assignment, consent or termination documents.
Property condition, insurance and any required third-party reports.
Equipment, fixtures and improvement allocation.
Closing dates, possession and contingency between transactions.
Funds flow, debt payoff, prorations and deposits.

Do not promise a closing date until the parties, lenders and advisers have confirmed the dependencies.

Real Estate Due Diligence

Seller Preparation

Deed, ownership entity records and existing loan information.
Current leases, amendments, options, guarantees and notices.
Property tax, insurance, utility and operating-expense history.
Surveys, title policies, plans, permits and certificates available to the owner.
Service contracts, warranties and records for major building systems.
List of equipment, fixtures and improvements with ownership identified.
Known repairs, claims, code, zoning, accessibility, environmental or property-condition matters.
Related-party rent history and support for proposed future rent.

Buyer and Lender Review

Title, survey, legal access, parking and recorded restrictions.
Zoning, permitted dental use and applicable approvals.
Property condition and the expected cost of repairs or replacements.
Environmental review when required by the buyer, lender or facts.
Insurance availability and requirements.
Appraisal, market rent and comparable evidence.
Lease economics and tenant obligations when the property will be leased.
Closing conditions and coordination with the practice acquisition.

The appropriate scope depends on the property, transaction and lender. Do not treat this list as a substitute for professional diligence.

Florida Considerations

Florida real estate brokerage activity is regulated under Chapter 475 and the Florida Real Estate Commission. Confirm the current license status of the brokerage and individuals providing compensated real estate services through the Florida Department of Business and Professional Regulation.

Florida repealed state sales tax and discretionary sales surtax on rent or license fees for commercial real property for rental or occupancy periods beginning October 1, 2025. This statement was checked against Florida Department of Revenue guidance on October 17, 2026. The parties should verify current law and distinguish real-property rent from equipment, services or other charges that may receive different treatment.

Property taxes, documentary taxes, federal gain, depreciation, entity ownership and other consequences depend on the facts. A qualified Florida attorney and tax adviser should review the contemplated property sale, lease or sale-leaseback.

Local zoning, permitting, signage, parking, utilities and building requirements vary by property and jurisdiction. Confirm lawful dental use and any planned changes with the appropriate local authorities and professionals.

A Practical Decision Process

Confirm Ownership and Goals

Identify the property owner, debt, basis records, retirement goals, income needs, risk tolerance and desired involvement after the practice sale.
Separate the Analyses

Obtain the appropriate practice valuation or pricing analysis and property appraisal or market analysis. Identify real estate, equipment and improvements without double counting.
Compare Realistic Alternatives

Model a property sale, retained lease and any third-party sale-leaseback using supported prices, rent, expenses, debt and timing. Include downside scenarios such as vacancy or capital repairs.
Ask Buyers and Lenders Early

Determine whether the practice buyer wants the property, how acquisition financing will be structured and which lease or property conditions the lender requires.
Negotiate Property and Practice Terms Together

Keep the prices, obligations and documents separate while coordinating contingencies, closing dates, possession and transition.
Complete Professional Review

Use a licensed appraiser, lender, real estate attorney, tax adviser, insurance professional and other specialists appropriate to the property and transaction.
Document the Ongoing Relationship

If the seller remains landlord, use a complete lease and communication process. Define responsibilities before closing rather than relying on the prior owner-operator arrangement.

For broader readiness steps, review KMF's guide to preparing a business for sale .

Frequently Asked Questions

Should I Sell My Dental Office Property with the Practice?

It depends on liquidity needs, desired rental income, risk, buyer financing, property prospects, taxes and whether you want to remain a landlord. Compare supported alternatives with your advisers rather than assuming a combined sale is best.

Can I Keep the Building and Lease It to the Buyer?

Yes, when the buyer, lender, property and documents support that structure. Use a market-based written lease addressing term, options, rent, expenses, repairs, assignment, guarantees, default and lender requirements.

Is the Dental Practice Included in the Property Appraisal?

Normally the operating practice and real estate require separate analyses. Confirm the appraisal scope and identify fixtures, equipment and improvements so value is not omitted or counted twice.

What Happens if I Lease My Current Office from Another Landlord?

Review assignment, change-of-control, consent, remaining term, options, guarantees and use restrictions early. A practice sale does not automatically transfer the lease.

What Is a Dental Practice Sale-Leaseback?

It generally means the property owner sells the real estate and the practice continues occupying it under a lease. Evaluate the property price and lease obligations together, including rent, term, options, escalations, guarantees and exit rights.

Does Florida Charge Sales Tax on Commercial Real-Property Rent?

Florida repealed state sales tax and discretionary surtax on commercial real-property rent for occupancy periods beginning October 1, 2025. Confirm current Department of Revenue guidance and the treatment of any equipment, services or other charges with a qualified adviser.

Can an SBA Loan Finance the Dental Practice and Property?

SBA-backed programs may be used in qualifying transactions, but program, occupancy, borrower, property and lender requirements vary. Discuss the proposed structure with participating lenders or a Certified Development Company before relying on financing.

Do I Need a Dental Real Estate Broker?

Use properly licensed professionals whose experience and role fit the transaction. Confirm the brokerage, license status, representation, disclosures, compensation and whether a qualified appraiser, attorney or other specialist is also needed.

Review Practice and Real Estate Options

If you own or lease your dental office and are considering a Florida practice transition, KMF Business Advisors can discuss the business and property questions that should be organized before a decision.

Request a conversation through the contact page. Do not place patient information, financial statements, tax returns, leases, title documents, appraisals or purchase agreements in a public message field. KMF can explain the approved process for sharing confidential records after initial contact.

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