Oral Surgery Office Real Estate: Buy, Build or Lease
Oral surgery office real estate decisions carry more weight than they do for many other practices. Surgical suites, recovery rooms, sterilization areas, medical gas and imaging rooms represent a substantial investment in the space itself. Whether you buy, build or lease determines who controls that space and who benefits from it over time.
This article compares the three main options and explains how each may be financed. Real estate, zoning and lease terms vary by market, and nothing here is legal, tax or real estate advice. Surgeons should work with counsel, accountants and qualified real estate professionals.
Why Real Estate Matters More in Oral Surgery
An oral surgery office is not easily moved. Once a practice installs surgical rooms, anesthesia infrastructure and imaging with shielding, relocating can be disruptive and costly. That makes the long-term security of the location especially important.
Location also affects referrals. Being convenient to referring general dentists and patients across a region can support growth.
Leasing an Oral Surgery Office
Leasing is often the starting point, especially for start-ups and surgeons who want to preserve capital.
Potential advantages:
- Lower upfront cash requirement
- Flexibility to relocate when the lease ends
- Possible tenant improvement allowances from the landlord
- Fewer responsibilities for building maintenance
Potential drawbacks:
- Rent may increase at renewal
- Improvements may revert to the landlord
- Limited control over the building and neighboring tenants
- Risk of non-renewal after a major build-out investment
If you lease, negotiate renewal options, assignment rights for a future sale and clear terms on who owns improvements. Counsel should review the lease before signing.
Buying an Existing Building
Purchasing an existing building can give a practice long-term control and the potential to build equity. Some surgeons buy through a separate entity and lease the space back to the practice, which may offer tax and estate planning benefits that an accountant can evaluate.
Buyers should evaluate whether the building can accommodate surgical requirements, including plumbing, electrical capacity, ventilation, accessibility and room for recovery areas. Converting a general office may require significant renovation.
Building a New Office
Ground-up construction offers the most control over layout, patient flow and surgical design. It also involves the most planning, including site selection, zoning, permits, design and construction management.
Construction projects carry risk of delays and cost overruns, so contingency planning is important. Our article on the oral surgery office build-out covers design and cost considerations.
Financing Oral Surgery Office Real Estate
SBA 504 Loans
SBA 504 loans are designed for owner-occupied commercial real estate and long-life fixed assets. They typically involve a participating lender and a certified development company working together. For surgeons buying or building an office that the practice will occupy, a 504 structure may be worth considering.
Eligibility and terms depend on occupancy, the business, the borrower, use of proceeds, program rules and lender review. Every loan is subject to approval.
Conventional Real Estate Loans
Conventional real estate loans follow each lender’s own underwriting. They may suit established practices with strong financials and may involve less program documentation than SBA options.
SBA 7(a) Loans
When real estate is part of a broader transaction, such as an acquisition that includes the building, SBA 7(a) financing may be used for both the practice and the property in some cases, depending on program rules and lender review.
What Lenders Review
Lenders typically consider the practice’s cash flow and ability to support occupancy costs, the borrower’s credit and liquidity, the property’s appraisal and condition, environmental review and the intended use. For construction, they will also review plans, budgets and contractor qualifications.
Owning Real Estate Through a Separate Entity
Many practice owners hold real estate in a separate legal entity that leases the space to the practice. This approach can keep the real estate separate from practice liabilities and may make it easier to sell the practice and the building independently in the future.
The structure has trade-offs. The rent the practice pays should be reasonable, the lease should be documented, and partners in a group need clear agreements about who owns the building and how interests are bought and sold. Counsel and accountants can help set up an arrangement that fits the practice and its owners.
Real Estate in a Practice Sale
When a surgeon eventually sells the practice, the real estate can be sold with it, sold separately or retained and leased to the buyer. Each option affects the buyer’s financing, the seller’s retirement income and the overall deal. Thinking about that future decision now can influence how the property is purchased and held.
Questions to Ask Before Deciding
- How long do I plan to practice in this location?
- Can I afford the upfront equity while keeping enough working capital?
- Will I need more space as the practice grows or adds surgeons?
- How would owning the building affect a future sale of the practice?
- Does the property suit surgical and anesthesia requirements?
Real Estate and Growth Plans
Some surgeons own their main office and lease satellite locations, balancing long-term control with flexibility. Our article on opening a second oral surgery office explores how expansion fits into real estate planning, and our guide to oral surgery practice loans outlines other financing options.
Final Thoughts
Oral surgery office real estate decisions shape your practice’s flexibility, costs and long-term wealth. Leasing offers lower upfront costs, while buying or building offers control and potential equity. Matching the choice to your growth plans and financial position can help you avoid costly moves later.
US Medical Funding helps oral and maxillofacial surgeons finance practice real estate, build-outs and expansion. Learn more about our maxillofacial surgery practice expansion financing and our full range of oral and maxillofacial surgery practice financing.
