Sound familiar?

Your waiting room is full. Your associate just asked about a partnership track. You’re booked three weeks out, your surgery schedule is locked, and your team is firing on all cylinders. By every measure that matters in veterinary medicine, you’re winning.

And every month, you write a rent check to someone else.

That check builds your landlord’s equity. It funds their retirement. It appreciates on their balance sheet. You get a receipt.

For most veterinarians, this goes on for decades. It doesn’t have to.

The Market Just Handed You A Massive Opportunity.

Something interesting has been happening in commercial real estate over the past several years, and it directly benefits veterinary practice owners who are paying attention.

Between 2009 and 2022, the number of veterinary practices nationwide grew to roughly 34,000. Pandemic-era pet adoption fueled that fire: one in five households added a new pet between 2020 and 2021, creating a wave of patients that practices are still seeing today. Meanwhile and unrelated, retail bankruptcies and store closures have left a surplus of well-located, appropriately sized vacant buildings across many markets. What type of locations, you ask?

Former banks, former pharmacies and even some former corporate veterinary locations too. These are freestanding buildings often with good parking, good visibility, and in some cases, pre-existing medical-grade infrastructure (or at least the power and water needed for a practice). These are exactly the spaces a veterinary practice needs and right now, and there are more of them available than at any point in recent memory.

The window is open. But it won’t stay that way.

Corporate Groups Don’t Want to Own the Real Estate. You Should!

Private equity and corporate consolidators now control roughly half the veterinary market. Think Mars, Thrive, UVC, SVP, NVA, Vetcor, Pet VetCare Centers, Suveto….the list goes on and on and on. These are not small players either, and they are moving fast. Here’s what most people don’t realize: these groups almost never own their real estate nor do they want to. Instead, they prefer turnkey facilities and operational scale with established practices already in place. They sign leases, they pay rent and it’s always to someone. And that “someone” could be you (if you choose that direction).

The independent practice owner has one structural advantage that no corporate group can replicate: the ability to own the real estate, occupy it, build practice value inside it, and then,  when the time comes, sell the practice while keeping the building. That’s two exits. Two asset classes. Two streams of wealth from one business that you already built.

Corporate groups are very good at a lot of things. Building personal generational wealth through real estate ownership is not one of them. However, this is what you can do as an independent practice owner. .

What the Right Space Actually Looks Like

After 31 years in the veterinary industry and now 5 years of specializing in veterinary real estate, I can tell you that not every available building is a veterinary building. Knowing the difference saves you time, money, and the potential for a very expensive mistake.

Here’s what I look for:

Where is the competition and where are the pet owners that will bring their pets to you? Does the space account for growth? Will you find staff and patients? Is it zoned outright or by CUP (conditional use permit) and if CUP, how long will that take?

Parking ratio.  Veterinary practices need more parking than most medical uses: you have a team of people that need to park and a patient flow that needs space too. A minimum of 5 spaces per 1,000 sf is a good starting benchmark. However, the Bay Area isn’t always flush with good parking so we might have to make concessions here.

HVAC load.  You need a system rated at a minimum of 1 ton per 300sf which is higher than standard office or retail needs. Surgical suites and treatment areas can generate a significant heat load and require precise climate control. No one wants to be sweating in the back mid surgery or during a dental.

Electrical capacity.  3-phase, 400-amp service is the standard for a full-service veterinary facility. However, we can get away with less due to improvements in full body xray (think capacitor assist).  Medical imaging equipment can push a standard retail electrical system past its limits so we have to be aware of what you need, and when.

Plumbing.  Multiple wet areas like dental tables, kennel runs, and treatment areas all require plumbing infrastructure that many retail buildings might lack. Add to that the need for staff restroom and client ADA restroom, these are things to be considered at the start.

Zoning.  Former medical and pharmacy uses are often pre-zoned for medical use, which can streamline permitting.

The good news is that a building with the right bones can be converted efficiently. The expensive surprises come when you discover the bones aren’t there after you’ve already signed a lease.

Lease First, Buy When You’re Ready

Not every practice owner can purchase real estate on day one. That’s completely fine but it’s not a reason to lease carelessly.

The strategy I walk my clients through looks like this:

1 — Lease smart.  Negotiate a lease that protects your right to stay, gives you room to grow, and doesn’t tie your hands when ownership becomes possible. The right lease includes renewal options, expansion rights, and ideally a right of first refusal to purchase if the landlord ever sells (though many owners won’t allow right of first refusal); possibly a restriction on veterinary use after your lease ends.

2 — Grow the practice.  Use the lease period to build revenue, establish your referral base, and strengthen your financials. Every dollar of practice growth also makes your eventual purchase financing easier. Not sure how to grow or afraid of raising prices? Talk to a professional like ProfitSolver to make sure you are charging enough and not losing money (or worse yet, paying the pet owner for doing blood work on Oreo due to fees that don’t even cover those costs)!

3 — Buy the building.  SBA 504 financing allows qualified buyers to purchase owner-occupied commercial real estate with as little as 10% down. For a practice with solid revenue history, this is often more accessible than people expect. Add to that, your tax professional can shed light on the various tax benefits to being an owner-user of real estate.

4 — Sell the practice, keep the real estate.  When you’re ready to transition out of practice ownership and retire to the beach or to the mountains, you sell the business. At the same time, you keep the building and lease it back to the new owner. Now you have passive income, long-term appreciation, and a retirement asset that doesn’t require you to do one more tooth extraction that takes way too long.

This is the playbook and it works. And it’s available to any practice owner who starts thinking about real estate as part of their exit strategy and retirement plan, not as an afterthought.

What Waiting Actually Costs You

Every year you lease your space instead of own is a year of equity going to someone else’s balance sheet. For round numbers sake, at $10,000 a month in rent, that’s $120,000 a year. Over a 10-year lease, that’s $1.2 million in rent payments with zero ownership to show for it. The practice owners who are building real wealth right now are the ones who recognized that their clinical expertise and their real estate strategy belong in the same conversation.