How Dental Real Estate Decisions Drive Practice Profitability — Insights from Dr. Scott Leune

This webinar, hosted by Dr. Scott Leune, dives into a critical but often overlooked area of running a profitable dental practice: real estate. Whether you’re trying to understand how to open a dental practice, planning to rent dental office space, or negotiating your lease renewal, this episode delivers concrete strategies to increase your dental practice profit through smarter real estate decisions.

Joining Scott is Ken Jorgenson, National Director at Carr, a healthcare-only real estate firm. Together, they explore how real estate impacts startup costs, long-term expenses, brand perception, and practice valuation.

The conversation isn’t theoretical—Scott speaks from experience, having built million-dollar practices, and Ken has advised on thousands of dental real estate deals nationwide. If you’re serious about leveraging dental real estate for profitability, this episode provides a blueprint.

About the Hosts

Dr. Scott Leune

• Dr. Scott Leune is a founder of Dental CEO Podcast and one of the most respected educators in the dental business world.
• Built multiple high-profit practices and helped thousands of dentists launch and grow their own.
• Focuses on practical, data-driven methods to scale profitability, reduce risk, and improve operations.

Ken Jorgenson

• Ken Jorgenson is a national Director at Carr, a leading commercial real estate firm that exclusively represents healthcare tenants and buyers.
• Has over 16 years of experience helping dentists negotiate leases and purchase properties.
• Specializes in guiding dental professionals through complex real estate decisions, including lease renewals, startup site selection, and purchase strategies.

Key Highlights from Scott Leune’s Perspective

1. Real Estate Directly Impacts Dental Practice Profit

Scott Leune emphasizes that dental real estate is typically the second-largest fixed expense in a practice after payroll. Unlike payroll, real estate costs are negotiable—and that makes it a powerful lever to boost profit.

• Even a $5 per square foot savings on a 2,500 sq ft office means $12,500 annually.
• Over a 10-year lease, that adds up to $125,000 in savings—straight to your bottom line.

He warns that many dentists ignore this leverage and end up overpaying due to lease escalators or poor negotiation posture.

2. You Must Negotiate Early

Scott believes waiting too long to review your lease puts you at a disadvantage. He recommends:

• Start renegotiating 12–18 months before your lease expires.
• If you wait until the last 6 months, you lose the ability to move or posture yourself for concessions.
• Even if you’re happy with your space, exploring other options gives you leverage.

3. Retail Visibility Can Be Worth the Higher Rent

Scott Leune thinks that when it comes to renting dental office space, retail centers—even at a higher price—often make sense.

• He frames the extra rent cost as a marketing expense that drives walk-ins, brand recognition, and impulse visits.
• For a 2,000 sq ft office, paying $10 more per square foot in a retail center equals an extra $20,000/year. That could bring in 20–30 more new patients per month.
• Corporate DSOs like Heartland and PDS invest heavily in Class A retail spaces for this very reason—visibility drives growth.

4. Success Comes from More Than Just New Patients

Scott says dentists obsess over new patient volume, but profitability is a function of four things:

• New patients
• Diagnostic skills
• Case acceptance
• Collections

In saturated markets, you don’t need the most new patients—you need the right systems to turn every lead into production. Location helps, but how your team handles the phone, how well you diagnose, and your operational efficiency will make or break your practice.

5. Know the Landlord’s Motivations

Dr. Leune explains that landlords care about:

• Lease rates (which affect the value of their property)
• Cash flow (e.g., tenant improvement allowances)
• Risk (how likely you are to default)

If you understand their priorities, you can negotiate smarter. For example:

• Some landlords won’t budge on rent but will offer $100,000+ in tenant improvement (TI) funds.
• Others may offer free rent months or buildout periods.

Scott notes that having an experienced dental real estate rep (like Carr) gives you insights into what landlords have accepted in similar situations—leveling the playing field.

6. It’s a Poker Game—and Dentists Need Backup

Scott compares lease negotiation to poker:

• If you reveal you “love” a space, the landlord knows you’re emotionally invested and will offer less.
• When you have multiple properties in play, you gain posture.
• A specialist firm like Carr can help by handling communications, pushing competitive bids, and framing you as a high-value tenant.

Dentists have one of the lowest default rates of any commercial tenant, which means they’re highly desirable—but only if they negotiate from strength.

7. Lease Terms Matter More Than You Think

Scott believes dentists focus too much on monthly rent and ignore the rest of the lease.

You should also negotiate:

• Free rent months
• Buildout timeframe (to delay rent while you’re under construction)
• Tenant improvement allowance (TI)
• Exclusivity clauses (no other dentists in your center)
• Signage rights
• First right of refusal (to purchase or expand)
• Assignment and release clauses (critical when selling your practice)

Each of these terms can save or make you tens of thousands of dollars—especially when opening a dental practice.

8. Startup Dentists Usually Lease—Not Buy

Scott Leune says the typical startup dentist:

• Has little capital or existing assets
• Needs cash flow flexibility
• Wants visibility in high-growth areas where property is expensive

In those cases, leasing is smarter. Ownership becomes attractive later in your career, when you have:

• Assets to leverage
• A built-in patient base
• Less need for walk-in visibility
• The ability to use the practice as a tenant and the building as a long-term investment

9. Use Data to Choose a Dental Practice Location

Scott believes the decision about how to open a dental practice should start with demographics, not emotion.

You need to evaluate:

• Population density
• Growth rates
• Age distribution
• Competition ratios
• Referral traffic
• Accessibility and parking

He emphasizes that real estate is one of the biggest investments you’ll make—and it should be rooted in data, not vibes.

10. When Selling, Make the Lease Buyer-Friendly

If you’re planning to sell your practice in 2–3 years:

• Renegotiate the lease early to include extension options.
• Secure a right to assign the lease to the new owner.
• Try to remove your personal guarantee upon assignment.

Scott notes that banks won’t fund a purchase if the lease term is too short or if the buyer can’t assume the lease cleanly. These lease details can make or break a sale.

Final Thoughts

This episode turns dental real estate into a strategic asset rather than a sunk cost. Whether you’re exploring how to open a dental practice, want to negotiate a better lease, or are looking to sell your business, Dr. Scott Leune delivers a clear message: real estate is power—use it wisely.