Dr. Sanchez has spent twenty years building a thriving dental practice in Orange County. With retirement on the horizon, he’s trying to figure out what his practice is worth. A colleague sold last year for a multiple of revenue that sounds high, but he has also heard about corporate buyers driving up prices. Before he takes any offers, he wants real numbers. If you’re a dentist thinking about selling, refinancing or even expanding in 2026, understanding how practices are valued today can mean the difference between a windfall and a missed opportunity.
How Dental Practices Are Valued in Today’s Market
Here’s what most dentists don’t realize: practice valuation is as much art as science, and it changes with the market. In 2026, lenders are more cautious than they were a few years ago because interest rates remain elevated and the cost of capital is higher. Buyers look closely at net income, cash flow and future growth potential rather than only gross revenue. Most deals use some variation of an EBITDA (earnings before interest, taxes, depreciation and amortization) multiple. Practices with strong hygiene programs, diversified referral sources and stable income streams command higher multiples. On the flip side, practices heavily dependent on one doctor’s production or lacking up-to-date technology often see lower offers.
Corporate vs Private Buyers: Know Your Buyer Pool
This is where deals are won or lost. Corporate dental support organizations (DSOs) are still acquisitive in 2026, but they have become more selective. They typically pay higher multiples when they see scalability—strong hygiene, multiple associates, and the ability to integrate into their network. However, DSO offers often include earn-outs and performance clauses that can reduce your final payout if revenue drops post-sale.
Individual dentists and small groups usually offer lower upfront multiples but may be more flexible on transition terms. A private buyer might be the best fit for a community-oriented practice where patient relationships are paramount. Balancing these options requires more than comparing headline numbers—you need to model how each offer affects your net proceeds over time.
The Real Estate Factor: Own vs Lease
Many dentists forget that the building itself is a significant part of their practice’s value. If you own your office, the decision to sell the real estate along with the practice or to hold it and become a landlord can have major tax and cash flow implications. A sale-leaseback can free up capital for retirement or investment while locking in a long-term tenant—your buyer. Structured incorrectly, it can also undermine the practice sale because higher rent reduces cash flow and lowers the price a buyer can pay. If you lease your space, ensure your lease is transferable and has enough term remaining. Buyers and lenders want at least seven years of term to secure financing.
Hidden Risks and Common Mistakes
When we analyze transactions, several pitfalls appear again and again:
- Inflated Revenue Assumptions: Overstating production with one-time procedures or future projections will backfire during due diligence. Corporate and private buyers verify every number, and discrepancies erode trust and price.
- Ignoring Adjusted EBITDA: Owners sometimes forget to add back non-recurring or discretionary expenses (like personal travel through the practice). Properly calculating adjusted EBITDA can increase value significantly.
- Not Separating Practice and Real Estate: Combining practice and real estate debt can dilute your negotiating power. Align loan terms with your exit strategy and structure a separate building mortgage if you plan to sell both.
- Underestimating Capital Expenditure Needs: A practice with dated equipment or insufficient digital infrastructure may face steep discounts. Buyers price in the cost of modernization, so investing in necessary upgrades before listing can yield a higher multiple.
Strategic Moves to Boost Value Before You List
If this is structured incorrectly, it can cost you hundreds of thousands. The good news is that small adjustments can pay big dividends:
- Tighten Financial Records: Buyers and lenders prefer clean, transparent bookkeeping. Work with your CPA to prepare three years of tax returns, profit-and-loss statements and a current balance sheet. Remove personal expenses from the books.
- Diversify Production: Build recurring revenue through hygiene and preventive care. A practice where hygienists generate a significant portion of income commands a premium because the production is not tied solely to the owner.
- Optimize Staffing and Systems: Stable teams and documented procedures make transitions smoother and more valuable. High staff turnover or outdated systems raise red flags.
- Review Lease Terms: If you lease, negotiate renewal options before listing. A below-market lease with long term remaining makes your practice more attractive to buyers.
Thinking about buying, selling, or refinancing your dental practice? The Schilling Team can help you map out the smartest strategy for your situation.
What Your Practice Could Be Worth in 2026
So how much is a dental practice worth in today’s environment? Broadly speaking, general practices in Southern California are trading between 3× and 6× adjusted EBITDA, while specialty practices (like orthodontics or oral surgery) can see 6×–8× multiples due to higher margins. Practices with annual collections under $1 million often sell closer to the lower end of the range, while high-performing offices with multiple associates and strong brand recognition can push higher. These are guidelines, not guarantees; every situation is unique, and a professional valuation will consider dozens of factors, including patient demographics, payer mix, and local market dynamics.
Making Your Next Move
Valuation is just one piece of the puzzle. Timing, financing, and deal structure all interact to determine your net outcome. Whether you’re planning a full retirement sale, a partial buy-in for an associate, or a refinance to free up capital, a clear strategy is essential. Burnett Facer of the Schilling Team specializes in dental real estate and practice transactions. Our team integrates real estate expertise with practice valuations, financing solutions and exit planning to ensure you maximize value and minimize risk.
Ready to explore your options? Contact the Schilling Team today to discuss your practice valuation and get an honest assessment of what your practice could sell for in 2026.
Reach out to the Schilling Team and connect with Burnett Facer at (949) 212-1346 for a confidential consultation and real numbers on your next move.