Our dental practice real estate cooperative helps dentists decrease their property’s cap rate when they join a DSO, increasing value and increasing success.
Professional Transition Strategies’ new real estate concept improves property value for dentists who own and practice from a single-tenant building when they join a dental service organization (DSO). By joining PTS’ dental practice real estate cooperative, you can retain partial ownership of your building while significantly improving the property’s capitalization!
DSOs are the fastest-growing sector in dentistry, especially among younger dentists who are three times as likely as older peers to be affiliated with a DSO.
When DSOs purchase a practice, private equity groups often purchase the buildings that DSO affiliates practice from, but when a dentist joining a DSO already owns their single-tenant building, that property falls through the cracks. PTS’ real estate co-op groups these properties together and backs their leases with a portfolio worth hundreds of millions of dollars, increasing security and value for you.
Dentists who sell to our real estate co-op and retain partial ownership can benefit from the arrangement by lowering their cap rate, a formula used in real estate investing that divides the annual income of the property by value.
Lower Your Cap Rate
The cap rate is a measure of risk in an investment, and lower cap rates are more attractive to investors. Dentists who sell a portion of their practice to PTS’ dental practice real estate co-op can expect a lower cap rate on the same principle that makes any other type of business’s property more attractive to investors. If it’s occupied by a chain rather than a mom-and-pop shop, they see this as a lower risk.
Raise Your Return
The co-op bundles properties for dental practices, similar to how DSOs bundle dental practices, with the selling dentist retaining part ownership in a joint venture agreement and selling over time. A property that is part of a co-op portfolio of strong leases with many long-term tenants generating hundreds of millions annually is much more attractive to investors than a single-tenant practice generating half a million dollars per year, so one day when you sell, you can sell at a lower cap rate and secure a stronger return.
For dentists who own the property where they practice, that property is typically their second-most valuable asset after the practice itself.
If there was a way to lower your cap rate from 10 to 7, that’s a huge win! And by selling to our real estate co-op, the sale becomes a win-win for everyone. We work with numerous DSOs across the country and have an extensive history as the premier dental practice broker, giving us the connections, knowledge, and resources to create a successful real estate co-op for dentists across the US looking to join a DSO who already own their practice location.
Our real estate co-op concept has not been done before in the dental industry, which has allowed us to create additional value for our clients as they retain partial ownership, lower their cap rate, and are backed by a solid, long-standing portfolio.
Contact Professional Transition Strategies to Learn More About Our Real Estate Cooperative Today
Our commitment to client success in addition to our expert consulting services help dental professionals improve their operations, marketing, accounting, and all other facets of their practice management or transition story. Learn more about our latest services and our dental clinic real estate co-op today – and see how we can improve the way you do business!