We have a mixed use residential property of four units and a dentist office. The Dentist is retiring and the daughter dentist is buying his practice. It has been a rough winter in the northeast and it's the second time in 13 years with mice in the side room from the dental office. We were negotiating a new lease. She refused this lease. Then the daughter told us a week ago she is leaving. The lease happens to end in June.

We do not have a good relationship with them. Although for the past 13 years, we have served them whenever they called and we were there within 3 hours to fix their complaints. They treat us like we are their servants.

They do not have a plan on how to exit. It is as though they decided in one week. She does not have a place to move yet. The old lease was not by a lawyer but a real estate agent written in 2001. It stinks. It does not state they have to removal of their dental equipment and office furniture when they leave etc. It's five pages.

The practice can only support one dentist. Getting another dentist in there I believe is fruitless. I want to look for another commercial business to move in or turn it over into two more apartments.

I am contacting you because I don't know anyone else who owns real estate. My husband says sell it, but our commercial business may leave and the taxes and insurance are very high $36,000 a year. The value of the property would drop considerable. He is not a real estate investor or finance person. I want to fix it up and then we could sell it or keep it. The building is paid off. It is worth 1.25 million with the dentist and at least 1 million without the dentist.

Any advise?

I would hold out until they actually start moving.

Did they give written notice? What does your flimsy lease say about that?

A couple of months still to go and they sound disorganized. She might change her mind when she goes out to see what else is available.

I don't know how you are handling this (no accusations), but a dental office has to be really clean, and so mouse and vermin control should be full time, not as a reaction when something moves in. Because there is more than one unit in the property, pest control pretty much falls on the landlord.

I'm not at all sure that it would be all that hard to find a replacement dentist. If another one moves in, he will catch some of the regular customers who continue to come to the same office instead of trying to figure out how to follow their dentist's daughter, who wasn't their dentist, anyway.

Hi all,

The lease is a commercial lease. It is structured differently. At this time they need to sign a new lease or be out by the end of June. Basically impossible because they have to notify their patients, move the patient files, and take everything including dental equipment, furniture. They have to give us a 90 day notice of exit due the end of March. She does not have a place to move to.

We had to close a medical office and it took about a year.

I like the idea about offering the yearly pest removal service. We have a service now but it is not yearly. In the fall, we sealed the bottom of the building perimeter by a cement contractor. There must be food in the dental office to attract the critters.

The great news is you are allowed to have a mixed use property. I'd convert the dentist office to rentals and make it all residential. Then sell if you want to with 100% occupancy.

Gut the office to the exterior walls and make apartments. Expect $200-$250 a sq ft in reno costs (at least here in NC)

I would think it would be difficult to fill your commercial unit. Mom and pop dentist practices are slowly giving way to places like Aspen.

it sounds like you saying your tenant leaving is worth a quarter million. Why aren't you providing a financial incentive to have your tenant perform?

Hi Again,

The square footage is 2000 sq ft. reno cost would be (I use the NC suggestion above of 200-250 a sq foot), $400,000-$500,000 is huge amount to reno two apartments making together $3000 a month. We are located in the suburbs of Philadelphia and the cost of living is higher than most places.That is half of what the building is worth. Does it really cost that much? What do you think... How do I find this out?

The other four apartments currently make $5,600/ month. If all were apartments- six apartments. The rent would be $8600/ month, taxes and insurance would be about $25,800 a year. Yearly income is $103,200 subtract one quarter is $77,400

The township has been hard on commercial properties and during 2020 our taxes and insurance amounted to $20,157, the next year it was 40,533. We complained and they brought it down by almost $10,000. The next year it was $32,320. Today five years later it is $36,000 with insurance. So we pay 1/3 of our yearly income to taxes and insurance with the dentist. Our yearly income with the dentist is $111,500 and we pocket 2/3 which is 73,600.

Compare that with when all six apartments are rented to the dentist the difference would be $4000 less per year. Taxes and insurance with just rentals would be 1/4 of the yearly income of $103,200 about $77,400. Hmm.. It looks like a wash, if we sell after reno but a loss by the amount we have to reno.

We talked last night and the daughter is young. She said she wants a Zen place that looks like a hotel lobby to attract young patients. Our place was built in the 1950s and is brick. She said it seems mostly old people come to her and she wants more young patients. I offered her how we could change it for her or she could buy the place but she said no.

If she leaves and we fix it up, it would be worth 1.1 million with out the dentist actually less with the dentist unless she signed a ten year lease.

How do I find out the reno per square ft in PA?

How stupid are you? You are taking their money which makes you their servant. I always go the extra mile for my tenants and they pay me for that effort.

Good luck getting a NNN lease on an older building that has problems already.

Bizstats dot com will tell you how contractor price out their work.

I like the concept of finding a solid NNN tenant. I have three of them currently. What I don't know all that well, is how to effectively market your product to the limited niche that you have. How close is this place to your local hospital? Reimbursement from insurance companies is pegged to your location to that hospital.

I like having flex space where someone in the trades or light manufacturing would need the warehouse/production/repair space.

Within the dental world, franchises are putting the squeeze on independent operators. Hindsight is always 20/20, but having a participative lease with participative outcome might have held that tenant in place to the point where they bought you out. Think of it in terms of you giving them a $XXXX sellers assist to buy the place only if they do buy it, every year that they stay in the place.

I came to the conclusion it is time to sell. The father dentist did ask for a three year extension to the lease. We will sign and sell in a few months. I have been told the father dentist wants the daughter dentist to build up her clientele before she moves since her business is running off his prior work.

I went to my real estate agent and we both separately did our calculations. The county has raised the taxes on commercial properties so high. Three years ago, we fought the taxes. They did lower them enough. Secondly, the township has such restrictions with zoning that when the daughter leaves, our income will drop 42% and because of zoning we could only recover 22% of that loss with a new commercial tenant. In addition we would most likely have a $100,000 rehab bill. The place is paid off.

I'm late to the party here. I think older mixed use buildings are a tough go. Medical practitioners are basically working for insurance companies who don't want to deal with small practitioners. That's the main reason these guys are all part of larger groups nowadays. Many smaller service firms are operating virtually, so they're not in the tenant pool. I had two mixed use buildings. I sold one and converted the other to 100% residential. I drove past the one I sold recently and the office space is still empty. It's been empty for at least 6 months.

The county is Delaware County,PA and it's right outside of Philadelphia. When I bought the place 14 years ago, 2012. The taxes and insurance amounted to $14,716. In 2021, the taxes and insurance increased to $40,533. We went to the DelCo board and fought the tax bill and they decreased the taxes by $9,000. For 2025, taxes and insurance amounted to $37,500. Last year, our insurance went up over $1,000 dollars. This year, 2026 costs will simply go up again.

When we sell we will have to take a loss because of the tax load.