Should I lease or own my medical building? A DFW doctor's directional guide

This is the single biggest financial decision a doctor makes before signing a construction contract. Leasing feels safer. Owning builds wealth. Here's the framework Pereff uses to help doctors think through it — without pretending there's a universal right answer.

The leasing vs. owning question comes up in almost every doctor conversation at the early stage of a project. It feels like a real estate question. It is actually a practice strategy question — and the answer depends on where you are in your career, how established your patient base is, what your capital position looks like, and how long you realistically intend to practice in the same location.

There is no universally correct answer. What follows is the framework Pereff uses to help doctors think through it — the same framework a good healthcare real estate attorney or CPA would use, focused on the variables that actually move the needle in North Texas.

The case for leasing: when it makes sense

• You're in the first 1–3 years of a new practice and haven't yet validated that the location works. A 5–7 year lease with renewal options gives you time to confirm patient volume, payer mix, and market positioning before committing $2M to land and a building.
• Your capital is better deployed elsewhere. A ground-up dental or medical facility in DFW requires a substantial down payment or equity contribution (though Pereff's bank facilitation has structured 100% financing for qualifying projects). If that capital is currently generating strong returns in the practice — equipment, staffing, marketing, additional operatories — leasing preserves the optionality.
• You expect your space needs to change significantly. A practice in growth mode may outgrow a fixed building in 5–7 years. A lease allows you to right-size at renewal.
• Your time horizon for the practice is under 10 years. Building equity in real estate takes time. A doctor planning to sell or wind down within a decade typically doesn't have enough runway for ownership to pencil as clearly.

At $25–$40 per SF annually, a 4,000 SF dental practice in Plano leases for roughly $100,000–$160,000 per year in occupancy cost — before CAM charges (common area maintenance) and periodic rent escalations, which are standard in commercial leases and typically run 2–3% annually. Over a 10-year lease at 3% annual escalation, the effective cumulative cost climbs substantially. Factor that into the comparison.

The case for owning: when it makes sense

• You have an established practice with 3+ years of stable, documented income. Banks underwrite healthcare owner-occupied real estate loans heavily on the doctor's financial profile — income history, debt service coverage ratio, and net worth. A new-start practice with no income history faces a harder financing path than an established practice with predictable collections.
• You intend to practice in the same location for 10+ years. Ownership builds equity over time, and the value of a medical office building is supported by your lease-to-yourself (you are simultaneously the best and most stable tenant). At practice sale or retirement, you can sell the practice and keep the building as a passive income asset, or sell both.
• You want a building designed exactly for your practice — not a generic vanilla-shell compromise. A ground-up owner-occupied facility is sized, configured, and finished for your clinical workflow. The operatory count, imaging suite, sterilization design, staff flow, and patient experience are built to your specification — not whatever the previous tenant left.
• Tax advantages. Interest and depreciation on a commercial building owned by the practice entity (or a separate real estate holding entity) provide meaningful deductions. Consult a CPA for specifics — the tax treatment depends on how the entity is structured.

The phased approach most DFW doctors use

The most common pattern in Pereff's client base is this: a doctor leases for the first practice phase — building the patient base, confirming the location, and establishing the financial track record the bank wants to see. After 3–5 years, with a documented revenue history and a clear picture of the practice's long-term trajectory, they build their own building. The lease becomes a temporary platform; the ground-up is the permanent home.

The numbers that matter: a directional comparison

For a 4,000 SF dental office in Plano — directional, not a quote or financial projection:

• Lease path: $28–$35/SF annually ($112,000–$140,000/year) + CAM of $5–$8/SF ($20,000–$32,000/year). Total occupancy cost: $130,000–$172,000/year before escalations. Over 10 years with 3% annual bumps, the cumulative cost approaches $1.5M–$2.0M with no equity built.
• Own path: Ground-up 4,000 SF dental office in Plano directional construction budget: $800,000–$1.2M hard costs + soft costs and FF&E. With Pereff's bank facilitation, 100% financing eliminates the down payment requirement for qualifying practices. Monthly debt service on a $1.2M loan at current healthcare lending terms is typically lower than the equivalent lease cost — and builds equity with every payment.
• The crossover point: Most analyses suggest that if you stay in the same location for 7+ years, ownership wins on a purely financial basis. Under 5–6 years, leasing typically wins because you haven't built enough equity to overcome transaction costs.

One factor most doctors underweight: the building as a retirement asset

A doctor who owns their medical building at retirement has three options: sell the practice and the building together; sell the practice to a buyer who becomes their tenant (generating passive rental income while they retire); or sell the building separately and pocket the appreciation. A doctor who leased their whole career has none of these options. The building as a retirement asset is not hypothetical — it is one of the most reliable wealth-building tools available to practice owners, and it is only available to those who built or bought.

Pereff's role in this decision

Pereff is not a real estate broker or financial advisor. What we can do — as both contractor and developer — is help you model the ground-up path concretely: a realistic construction budget, the financing structure that Pereff would facilitate, and a directional proforma for the project. That gives you one side of the lease-vs-own comparison grounded in real numbers, not estimates from a spreadsheet you found online.