Selling a Dental Practice With Real Estate

March 16, 2026 | Selling | 10 min read

When you own both the dental practice and the building, you face unique decisions. Should you sell together or separately? This guide helps you navigate the complexities of selling practice plus real estate.

Two Sale Structures

Option 1: Combined Sale

Sell practice and building to same buyer:

• Simpler transaction
• Single buyer to qualify
• Coordinated closing
• Potential tax advantages

Option 2: Separate Sales

Sell practice and building independently:

• Larger buyer pool for practice
• Real estate investors can buy building
• Timing flexibility
• 1031 exchange possible for real estate

Valuation Considerations

Practice Value

• Based on EBITDA or collections
• 2.5x - 4.5x multiples typical
• Independent of real estate

Real Estate Value

• Commercial appraisal required
• Based on comparable sales
• Income approach (rental value)
• Replacement cost method

Tax Implications

Combined Sale

• Practice: Capital gains treatment
• Real estate: Capital gains or 25% depreciation recapture
• Allocation between assets critical

Separate Sales

• 1031 exchange possible for real estate
• Defer capital gains
• Requires reinvestment in like-kind property

Financing Challenges

Combined Purchase

• Higher total loan amount
• SBA 504 loan ideal
• 10% down payment possible
• Longer terms (20-25 years)

Practice-Only Buyers

• Smaller buyer pool for combined
• Many dentists can't afford both
• Seller financing may be needed

Leaseback Options

Sell building, lease back to practice:

• Generate immediate cash from real estate
• Retain practice ownership
• Guaranteed tenant (your practice)
• Popular with real estate investors

Decision Framework

Choose Combined Sale If:

• Buyer has substantial capital
• Simpler transaction preferred
• Real estate integral to practice location
• Limited investor interest in area

Choose Separate Sales If:

• Maximize total value
• 1031 exchange desired
• Practice buyers can't afford building
• Investor market strong

Conclusion

Owning real estate complicates practice sales but offers opportunities. Evaluate both options with your tax advisor and broker to determine the best approach.

Get Real Estate Guidance

DentalBridge works with dental real estate specialists who understand the unique aspects of practice plus property sales.

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