When a physician buys a walk-in clinic, a dentist acquires a retiring colleague's practice, or a veterinarian or pharmacist buys an established location, most of the attention goes to patient numbers, billings, and goodwill. The real estate is often treated as a detail. It should not be. The goodwill you are paying for is attached to a location, and that location is controlled by a lease or a deed. If the lease cannot be transferred, expires in two years, or lets the landlord relocate you, the practice may be worth far less than its price.
Start With the Lease, Not the Financials
Ask the seller for the full lease and every amendment, extension, and side letter before you get deep into due diligence. Then answer these questions:
- How much term is left, and are there renewal options? Goodwill depends on staying put. Remaining term plus renewal options should comfortably cover your financing period and your plans for the practice.
- Can the lease be assigned to you? Most leases require the landlord's consent to an assignment. Read whether consent "may not be unreasonably withheld" and what conditions the landlord can attach.
- Does a share purchase trigger consent? Many leases treat a change in control of the tenant company as an assignment.
- What does the seller still owe? Rent arrears, unpaid additional rent reconciliations, or outstanding repair obligations can follow the lease.
- Are there relocation, demolition, or redevelopment clauses? These let a landlord move or end your tenancy, which matters a lot in older plazas slated for intensification.
- Is the use clause broad enough for how you plan to run the practice, including new services or practitioners?
- Is there an exclusive protecting the practice from a competitor moving into the same plaza, and does it carry over to you?
If the term is short or the clauses are weak, the right move is often to make a new lease or an extension with the landlord a condition of closing.
Expect the Landlord to Ask Questions Too
Landlords will want to know who is replacing a tenant with years of payment history. Be ready with a short business plan, your professional background, and financial information. Expect a request for a personal guarantee, and remember that the seller will usually want to be released from theirs. Both points are negotiable, and both take time, so start the landlord conversation as soon as the deal is reasonably firm.
Check the Physical Space and Its Permits
An established clinic is not automatically compliant or well suited to your plans. Confirm:
- Zoning and permitted use for the practice as you intend to run it.
- Building permits for past renovations, especially plumbing, X-ray or imaging rooms, and added treatment rooms.
- Accessibility of the entrance, washrooms, and path of travel.
- Capacity for growth: room count, parking, and whether the floor plan supports added practitioners or services.
- Major building systems (HVAC, electrical, and plumbing), and who is responsible for repairing or replacing them under the lease.
For practices with specialised infrastructure, such as dental operatories, pharmacy dispensaries, imaging, or veterinary surgery and kennels, the cost of replicating the fit-out elsewhere is part of what you are buying.
When the Seller Owns the Building
Many retiring practitioners own their clinic property, which gives you three options: buy the practice and the building together, buy the practice and lease from the seller, or buy the practice with an option or right of first refusal on the property. Each has different financing, tax, and risk consequences.
If you lease from the seller, the new lease is drafted from scratch, so you can negotiate a market rent, a long term with renewals, and a clear purchase option. If you buy the building, treat it as a separate real estate acquisition: an independent view of value, a building condition assessment, an environmental review where warranted, and commercial mortgage financing. Our guide to buying a medical commercial condo covers owner-occupier purchases in more detail, and our sale-leaseback guide explains how sellers sometimes structure the property side.
How to Finance a Medical Practice Acquisition
Clinic and practice purchases are usually funded with some mix of a bank or professional practice loan for the goodwill and equipment, a commercial mortgage if the building is included, the buyer's own equity, and sometimes a vendor take-back, where the seller carries part of the price. The same building blocks apply whether the clinic is in Edmonton, Calgary, or Ontario. Lender appetite and terms vary by discipline, location, and borrower, so speak with more than one lender.
The real estate shapes that financing more than many buyers expect. Before committing, a lender will commonly want to see:
- A lease that outlasts the loan. If the remaining term plus renewal options is shorter than the amortization, expect the lender to ask for an extension first.
- The landlord's written consent to the assignment, and sometimes a landlord waiver that protects the lender's claim on equipment in the premises.
- A clear split of the price between goodwill, equipment, and any real estate, because each is financed differently.
- Property due diligence if you are buying the building: an appraisal, a building condition assessment, and an environmental review where warranted.
Start the lease and landlord work at the same time as the loan application, because consent can take weeks and a lender's approval is often conditional on it. PRAXIS is not a lender, so confirm rates, terms, and security directly with your lender and accountant.
Build the Right Team
A clinic acquisition usually involves:
- An accountant or practice valuation specialist for goodwill, billings, and tax structure.
- A lawyer for the purchase agreement, lease assignment, and regulatory requirements.
- A lender familiar with professional practice financing.
- A healthcare real estate advisor for the lease, landlord negotiations, location analysis, and any property purchase.
This guide is general information, not legal, tax, or valuation advice.
How PRAXIS Helps
PRAXIS Healthcare Real Estate, a division of Lucero Commercial Group, advises physicians, dentists, pharmacists, and veterinarians buying established practices across Ontario and Alberta on the real estate side of the deal. Led by Mya Qi, MPH, we review the lease and its transfer terms, negotiate extensions and assignments with landlords, assess the location, and represent buyers purchasing the clinic property itself. See acquisitions and dispositions, our guides to walk-in clinic real estate and buying a veterinary clinic, or start a confidential conversation.
Frequently asked
In an asset purchase, the seller's lease is usually assigned to you, which almost always needs the landlord's written consent. In a share purchase the tenant company stays the same, but many leases treat a change of control as an assignment that also needs consent. Either way, confirm the landlord's position early, because consent can take weeks and may come with conditions such as a new personal guarantee.
Enough to protect the goodwill you are paying for. Many buyers and lenders look for the remaining term plus renewal options to cover at least the length of the financing, and often ten years or more in total. If the lease expires soon or has no renewal option, negotiate a new lease or an extension with the landlord as a condition of the purchase.
Owning the building gives you control over your location and can build equity, but it ties up capital and adds property risk. It often makes sense when the seller owns the property, the location is central to the practice's goodwill, and the price and financing work. Many buyers lease from the seller instead, sometimes with an option or right of first refusal to buy later.
Most buyers combine a bank or professional practice loan for goodwill and equipment, their own equity, a commercial mortgage if the building is included, and sometimes a vendor take-back from the seller. The structure is similar in Edmonton, Calgary, and Ontario, though terms vary by lender. Lenders commonly want a lease that outlasts the loan and written landlord consent, so start the lease work when you apply for financing.
The goodwill and business value of a practice is usually assessed by an accountant or practice valuation specialist, and a lawyer drafts and reviews the purchase agreement. PRAXIS handles the real estate side: the lease, landlord negotiations, location analysis, and the purchase or lease of the property itself.