Commercial real estate

For over a decade, the Canadian real estate market has experienced growth that far surpassed any rational expectations.

In 2023, the reset of interest rates slightly cooled the market’s fervor, yet the core momentum remained unabated.

Currently, the prospect of rising interest rates looms, driven by increases in the Government of Canada’s five-year bond yields—a precursor to changes in the bank’s prime lending rate.

This development casts doubt on the possibility of interest rate relief in the spring or summer of 2024. I could be wrong.

Understand Ownership and Operating Costs

This context underscores the substantial costs of owning and operating commercial real estate for business owners.

While the residential market garners extensive coverage in media, this discussion will focus on the less-discussed commercial occupancy costs. I recently spoke with a Vancouver practitioner who highlighted a modern, high-tech development in an upscale neighborhood.

The going rate for a vacant commercial condominium there is $2,400 per square foot. Consequently, acquiring a 1,000-squarefoot space demands an investment of $2.4 million, excluding closing costs.

This price tag does not cover the additional expenses for leasehold improvements, which could ascend to another $500,000. Moreover, equipping the practice with necessary technology and equipment may require a further six-figure investment.

Hence, the total initial investment for launching a fully operational new practice in a 1,000-square-foot commercial condo in this elite Vancouver area could reach over $3 million.

This figure represents the debt burden from day one. A metaphorical $3 million ribbon-cutting ceremony, indeed. The journey to debt freedom begins thereafter, patient by patient, potentially spanning decades for the ambitious doctor.

To some, this scenario may resemble a perpetual commitment to a financial institution.

  • Amortized over 20 years
  • At the current prime interest rate of 7.2%
  • Monthly payment: $27,557
  • Total payment over 20 years: $6.6 million
  • Interest cost alone: $3.1 million!

A Harsh Reality

The financial strain on a young doctor would be immense, with the pressure to generate income being nearly insurmountable. Including wages, supplies, lab fees, and other operational expenses, the breakeven point for such a practice is a minimum of $60,000 per month.

And this calculation hasn’t yet accounted for personal living expenses. Therefore, anticipate an additional $250,000 in line of credit usage within the first year, with potentially more in the second year. In summary, within the initial years, this scenario could see the doctor facing $4 million in debt.

By the third year, with some fortune, they might manage to draw a salary between $50,000 and $80,000, yet still grapple with a $4 million debt and over $25,000 in monthly interest payments.

This is the harsh reality of real estate ownership for a new, state-of-the-art practice occupying 1,000 square feet in downtown Vancouver.

For illustration, consider doubling the space to 2,000 square feet and recalculating the figures—truly startling!

Navigating this level of debt while adhering to ethical standards in practice is a formidable challenge for any doctor.

Do you have a debt repayment story to share?

Contact me at: – I might feature your story anonymously and enter you into a draw for a free appraisal.

Jackie Joachim, COO ROI Corp


Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at or 1-844-764-2020.


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The location you pick for your practice is one the most critical business decisions you will make, and for new practices which rely on attracting new patients, will determine how quickly you reach profitability or even survive.  Here is a list of things to consider.

  • Awareness of your brand is critical to building the initial trial visit which ideally will lead to repeat visits throughout the years. Pick a location which is highly visible to thousands of consumers each week. Real estate with good traffic generators like grocery stores, liquor stores, drug stores, popular restaurants/pubs or big box retail like Wal-Mart, Canadian Tire, Winners, Marshalls, Home Depot etc. The highest volume optical stores in Canada are located in the large regional enclosed malls which provide huge flows of walk-by traffic. Occupancy costs are much higher so these practices must generate very high sales to survive.
  • Ease of access is very important. Most people do not casually visit an optical practice and in fact regard it as an expensive chore, so you want your store on the path of their normal round of weekly or monthly shopping.
  • Mature markets with established practices and loyal patients will be much tougher to penetrate than an area that is growing with new consumers looking for a new service provider.
  • Another key market dynamic is the type of competition. Some markets may have a competitor selling designer frames at close to cost, a battle you will inevitably be drawn into if you locate there. Conversely your research may reveal that the established operators are out of touch with the market and or give poor service, which spells opportunity.
  • Use an experienced retail agent if you can find one. Many real estate (residential) agents will take your business without being able to add any real value. Ask the prospective agent to list the specific retail deals they have done. A good agent will know listed and unlisted vacancies, and importantly what kind of deal is possible with a given landlord. The agent’s fees are generally paid by the landlord.
  • Understand that Optometry/optical stores are one of the best tenants a shopping centre can have. It is a clean, unobtrusive, attractive use, does not use a lot of parking and is likely to generate a good revenue stream for years.
  • Buying versus leasing. It’s great if your occupancy costs can go towards buying a location, but most of these are residential homes zoned for retail, condo ground floors, or commercial condos. These may work if you have a well-established practice, but unlikely to have the traffic necessary to build a business very quickly.
  • Don’t get sucked into taking a space larger than you need, the smaller and more efficient a space the better. Occupancy costs are a fixed expense and can crater your income for the life of the lease if they are out of line.

Recognize that a well-established visible location in productive real estate is one of the biggest drivers of your practice’s value. Take your time planning for it, finding it and negotiating for it.


Tom Bollum was the founder and CEO of Eye Masters Canada (sold to Lenscrafters) and has held senior management positions in New Look Lunetterie and other optical companies before joining the Avison Young Commercial Real Estate Brokerage retail practice. He has sourced and negotiated locations for many optical stores across Canada.


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We are often approached by ODs who are looking for help to open a new practice. One of the first questions asked – either by the client or by us! – is where? When you are investing a quarter of a million dollars, and often more in construction, it is crucial to get this right. The right location can be the difference between making a profit in the first year or not until the third year, or even later.

Our first recommendation is to think outside the box. While it may be tempting to gravitate to the larger cities because of the denser population, remember that these areas are also the most competitive. They have lots of choice and can choose an experience or service provider that caters best to their particular needs. Strong differentiation in terms of both product offerings and service becomes key for success. Conversely, a smaller, more remote location will allow a more general practice strategy. However, in today’s digital world, it is still critical to create an experience that patients will want to support whether you are in an urban or rural setting.

After determining what will set your new clinic apart, and whether you are going to set up in a larger or smaller community, the next step is to find the physical location that will support your strategy. Commissioning a Geo-marketing Report is the best way to accomplish this. They are produced by non-stakeholders. This tool will compile and analyse the best available data for a given geographical area of interest. Some data taken into account includes competitor information and population demographics for that area, such as age, income level, ethnicity and education level. This data is then matched with your clinic strategy. Ultimately, this will provide you with a consensus report that can pinpoint the ideal location for your new business.

Lastly, your business strategy will also dictate what part of a building you should set up your business in. If you are setting up a primary care practice that will be dependent on optical sales for 50-60% of your revenue, it is imperative that you have street access, visibility and plenty of parking.

Remember to think like a consumer as you make these decisions. The days are gone where patients want to buy glasses from a small selection from an office buried at the back of a medical building. Consumers are gravitating to a different experience, as evidenced by the wildly popular new optical stores popping up all over Canada. A new business owner must rise to the challenge and spend time finding the ideal location for their new practice.



is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at


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By Timothy A. Brown, CEO, ROI Corporation

Throughout my career I have heard lawyers, doctors, and property owners talk about giving a tenant the first right of refusal in a premise lease. The result: If the building should come for sale at the landlord’s discretion, the tenant has the first right of refusal to purchase the building.

The following definitions are reprinted with permission from Commercial Investment Real Estate published by CCIM Institute:

Option to Purchase.
This provision grants the holder the right to purchase an indicated property during the term of the option without respect to the owner’s desire to sell. In other words, the holder can force the owner to sell the property by exerting the option. Options to purchase often include specific terms

Right of First Offer.
Sometimes referred to as a right of first opportunity or first right to purchase, this provision requires the owner to give the holder the first chance to buy a property after the owner decides to sell. Unlike the option to purchase, the holder cannot force the owner to sell

Right of First Refusal. 
Sometimes referred to as a right of first opportunity or first right to purchase, this provision requires the owner to give the holder the first chance to buy a property after the owner decides to sell. Unlike the option to purchase, the holder cannot force the owner to sell

Let’s explore precisely what the first right of refusal actually means. In order for a tenant to have the right to refuse to buy a building, the property owner must actually take the property to the open market and bring other buyers into the fold. They can do this privately or they can do this through the services of a real estate and business broker. In this process, the owner must reveal that there is an existing tenant and disclose the terms of the lease. Potential buyers would typically want to explore the property inside and out, often get their own appraisal done on an independent basis and in some cases have a property inspection performed.

Thereafter, the purchaser or the multiple purchasers (given the current overheated market reality) would present their offers to the owner and/or through his/her agent.

At this juncture, the owner is obligated to approach the tenant who possesses the  first  right of refusal  and show them the highest and/or the most attractive bid to see if the tenant will actually refuse or agree to match that offer.

Think this process through from both sides. If you are the tenant, do you want your landlord parading potential purchasers through your rented space while he or she is attempting to attract open market offers in  order to find out how much you may be prepared to pay?

If you are the landlord, do you want to “use” the market knowing that you must disclose that this first right of refusal for the tenant actually exists in the leased premises?

A licensed and qualified broker must dis- close that your tenant has the privilege of matching any offers the market may actually present. What kind of offers are people prepared to make knowing that they may be matched or surpassed by the tenant and therefore, these potential purchasers may actually feel they are being used in order to motivate the tenant to buy the property.

As a landlord myself, as well as someone who buys property, when I know a tenant has the  first  right  of refusal, my interest  in the property is diminished. If I do make an offer, I will not spend a lot of time or money preparing the offer nor make the best offer I think the market would bear, knowing that it is possible that my offer will be matched or bettered by the tenant.

Now let’s consider an alternative option I have promoted over many years, yet failed to get agreement on by both property owners and lawyers. It is called the first option to purchase. Essentially, what this means is that the lease afforded to the tenant will basically say if I as the landlord decide to sell this property, I will come to you, the tenant, with the first option to purchase the property. I do not engage a real estate agent. I do not put  it on the open market. I do not parade anybody through your exclusive use rented space in order to drive up price and try to get the market interested. I come  to you and only you and I approach you first as you possess the first option to purchase. After a specified period of time, say 30 to 60 days, if we do not come to agreement in the terms of sale, I still reserve the right as the landlord  to put the property on the open market in the usual and customary process of selling real estate.

The result is you have been respected as the tenant. You were the only individual that I as the owner negotiated with. I may get an appraisal at my expense. You are certainly entitled to get one at your expense. If we can successfully negotiate, a deal struck. The open market, real estate agents and potential buyers have not been used to put us at odds. As an owner, I am not trying to drive price  up and you have not been annoyed with my bringing potential purchasers through the property and we both accept the fact that I really just wanted to do business with you in the first place.

I consulted with Todd Slater, founder of The Simple Investor, and a past contributing author to Profitable Practice magazine on this topic. Todd owns and/or manages over 1,000 income properties.

I  am a client of Todd’s firm. He completely agrees with me! As well, I surveyed several leading lawyers who agree with me, but they find it  difficult to alter the thought process and language of the legal profession that has been fixated on this absurd, outdated concept for decades… I hope this article helps to change the mindset.

The first right of refusal—or—the first option to purchase? If you are a landlord, what do you think is fair? If you are a tenant, which would you prefer?



is Chief Executive Office of ROI Corporation Canada’s national professional practice and brokerage firm.


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Shopping for office space is like shopping for a house. It is easy to get distracted by first impressions. A beautiful, bright space is tempting, but will renting or purchasing the space give your practice what you need to grow? My practice recently made a move to a new space. Here is how I connected my strategic goals for my practice to the new space we found.

Match Patient Volume to Space

Our old space had distinct limitations. It was less than 900 square feet, far too small for the more than 3,000 patients we see each year. We also lacked prominent street-front views of the office, so people could not see us from the road. Including the doctor that I bought the practice from, we had been in that space for over 30 years, and still people in the neighborhood did not know we were there. We were only attracting one demographic, and we wanted to have a more diverse population of patients.

The well-trafficked corner in West Palm Beach, Fla., where Dr. Jasper moved her practice, Advanced Eyecare Specialists.

To retain patients, we limited our scope of searching to less than five miles. We didn’t want to inconvenience existing patients, so we ended up choosing a space less than .5 miles away from our old space, and yet we already have seen a large increase in new patients.

Location, Location, Location

Location is key. I really think you need patients and prospective patients to have an easy-to-see street-front view of your practice. People need to see you as they drive by. If they pass your sign daily, they will think of you when the time comes for eyecare and new eyewear. You need a good sign and good logo that is easy to see from the road to maximize the potential of your location. I have many friends that are successful in business centers with no prominent street-front view, and I am happy for them, but I suspect they would be even more successful if patients could see them more easily.

We chose our location because it is on a street corner that has 26,000 cars drive by daily, according to a feasibility study of the location that we conducted prior to signing the lease. We also chose it because it had the availability to have a very large sign on the corner with our name on it.

Patient Convenience

We currently have eight staff members, so we needed space for those eight cars, plus space for patient cars, and will need more space as the practice grows. We knew we had to have parking or patients would be discouraged from shopping in our dispensary. Our city of West Palm Beach, Fla., does not have much public transportation, so parking matters. We also wanted to find a location close to neighborhoods. We find that our patients like to see a doctor close to home and we wanted to find a location close to their homes. We have people who come to see us from many miles away, but the majority of our patients are moms bringing the family who are from the neighborhood immediately surrounding the office.

Announce Relocation with Bold Statement on Practice Web Site

I knew many patients would visit our web site before making their appointment, so I made sure our site featured the following announcement of our move:

“We’ve MOVED!
Since 1941 we have been serving our patients in West Palm Beach. As of January 3, 2012, we’re proud to announce that we have moved to a newer, larger facility just three blocks away so we can better serve YOU! Please give us a call for directions before your next visit.

Think Long-Term Growth

The large, enhanced optical shop featured at the new location of Advanced Eyecare Specialists.

We thought in terms of the long run when choosing our space. We knew that in our old space we would be limited in the number of patients we could see and would not be able to bring in a second doctor without a second and third exam room. It isn’t cheap to expand, but we also knew that with upcoming changes in medical care resulting from health care reform, we needed to be prepared to adapt to change.

Renting Is OK, Too

Purchasing an office space that can become a long-term investment is the ideal, but sometimes it is not possible. In our case, we rented this space we just moved into after searching for a location we could buy for two years unsuccessfully. Our lease is for five years. It typically takes 10 years to recoup the costs associated with moving, so prepare to stay put for a while following your relocation.

Compare What You Have to What You Would Be Getting

The optical in our new space is five times as big and has twice the number of frames and higher-end frames as our old space. We still have the same number of chairs In the optical, but our goal was more shopping space, not seating space. We now have a pre-testing area as well as a separate room for special testing so we can maximize our ability to move patients through the office quickly. We also were able to purchase more instrumentation for better patient care. We now have three exam lanes fully automated with Marco TRS systems, and the entire office uses electronic health records for maximum efficiency.

Delegate Search but Devote Time to Looking

A doctor with a full patient load probably will have difficulty setting aside the needed time to conscientiously shop for office space. In my case, I turned over much of the detailed searching to my husband, who also happens to be my practice’s business manager. We looked at more than 20 locations over a period of two years before making our final selection.

Don’t Forget: Office Space Must Enhance Patient Experience

You can have all the best instrumentation and best looking office and great selection of frames, but when the patients start coming into the office, the experience also has to be amazing. The beauty of the new space is that we have been able to create systems and efficiencies that make the patient experience one that they will want to return for. At the end of his exam, one of my patients recently said to me: “Dr Jasper, the office is beautiful, and the staff is amazing. The experience you have given me today well justifies the fee you charge.” That is what we strive for every day, and the new office has made that even more of a reality. To give our patients time to adjust to the new location, we kept our fees the same for the first six months following the move and then raised fees by $40. Happily, the majority of our patients have made the move with us.



April L. Jasper, OD, FAAO, is the owner of Advanced Eyecare Specialists in West Palm Beach, Fla. She is featured in a cover story in the Spring 2012 issue of MBA Insights. To contact her:


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Not too long ago, we introduced you to Jane and Steven Buchan, a pair of licensed optometrists who are looking to take the next step in their careers by purchasing an independent eye care practice. It’s a daunting leap forward for them, but they’ve chosen this route for several reasons:

  • They will be working with an existing client base, instead of developing one from scratch.
  • They don’t need to build the office from the ground up, choosing instead to renovate and maintain the existing facility.
  • They will have the opportunity to take over, learn from and build on the financial history and business plan of the previous business owner.
  • They will be able to get the business up and running faster than if they were starting net new.
  • They now have better chances for securing a good loan or additional lender support, as the existing business already has its own financial statements and a cash flow history that can be used to demonstrate profitability.

They’re both incredibly excited and anxious to begin putting their name on a business that they can own and grow together. Despite the comprehensive optometry training and experience they’ve acquired in recent years, they still somehow find themselves completely overwhelmed by the mountain of paperwork and obligations looming over them as they prepare to purchase. Who do they turn to for help?

The good news is that there are professionals you can count on whose expertise ties directly into complex business transactions such as these. The acquisition of any business is a big game and life changer for any healthcare professional, so it’s always good to take time and seek out specialized advice. Whether you are a seller or a buyer, arming yourself with the knowledge and counsel of licensed, reliable professionals is a benefit that cannot be understated.

Certified Public Accountant

Arguably the most important step in preparing to sell or buy a business is to make sure that its financial records are clean, up to date and duly completed. For sellers, it is also a good idea to make sure that all outstanding payments (to vendors or from customers) are settled before putting the business up for sale, as any unpaid balances increase the liability of a business and the risk associated with purchasing it.

This is where a certified accountant comes in handy. An accountant is your guide into doing due diligence and delving into the nitty gritty of the company’s financial paperwork. This will include anything from cash flow statements, evidence of working capital, accounts payable and receivable, previous and current vendor contracts, employee files, tax records, employment agreements, lawsuits, debts, leases, and all other details related to the company’s history. Accountants for both the seller and the buyer will need to examine these records. For either party, accountants will help you devise and negotiate a financing strategy that best aligns with your interests over the course of the transaction, taking into account important considerations such as capital gains deductions, tax deferral opportunities, purchase and sale of assets, purchase and sale of shares, valuations and potential sources of funds. Long after the business sale has been terminated, you will continue to rely on the help of your accountant to help you improve your business plan, maximize profitability and maintain the financial documentation required of you by the government and your shareholders.

Lawyer or Specialized Business Sale Attorney

Because businesses vary in size, specialty and complexity, it is important to find a law firm or a lawyer whose abilities cater to your specific professional needs. One of your first steps should be to reach out to your network to see if anyone has recommendations for firms or professionals with industry-specific experience, preferably a lawyer who has handled a similar transaction for another eye care professional in the past. Once you find a lawyer who appears to be a good fit, do not hesitate to check and ask for references.

An experienced, trustworthy lawyer can be one of your most valuable assets in detangling the intricacies that surround a business sale. As a seller, a business sale lawyer can assist you with drafting the necessary paperwork to prep the sale, which includes non-disclosure agreements, letters of intent, regulatory approvals, and agreements of purchase. As a buyer, your lawyer can help you evaluate the health of the business in question, examine the tax and liability implications of the acquisition, outline agreements related to shares and equity, and vet the contracts and clauses that are involved in the purchase.

In most cases, a lawyer can provide an objective second opinion on many aspects of the business sale that would have otherwise gone unnoticed and without consideration. This is the type of decision that will change your life and impact your family for several years to come. Your lawyer will be there with you every step of the way to help you face the more difficult questions that you will have to consider:

  • “What are the responsibilities of your business partner and/or your significant other if you were suddenly deemed unfit to continue working?”
  • “What will happen if the business defaults before the entire loan amount is paid?”
  • “In case of a drastic change of circumstances, is there flexibility for renegotiating repayment terms and what assets can be used to help repay the balance?

Like accountants, lawyers can also assist buyers with due diligence, which for them includes thorough research on the business’ history and finances, with a projection of its sustainability and future profitability. Most importantly, they represent your best interests when collaborating and communicating with all the parties involved in the transaction.

Since legal services are largely a buyer’s market, you have more leverage than you think when negotiating your attorney fees. At the same time, you must be cognizant of the specialization and the quality of the service provided and be ready to pay an appropriately high fee for their time and experience. Revising an existing contract or drafting one from scratch, can cost a business owner thousands of dollars for that single document. To make sure you are both on the same page, it is important to communicate your needs and your intentions for the business to your attorney early on. For the rest of the transaction and beyond, they will have a great influence on the success of your acquisition, and how well the business itself succeeds post-transition.

Business Market Brokerage

This type of brokerage is very different from other types of brokerages that you may already be familiar with. A reliable full-service business sale brokerage can provide a premium service to sellers by overseeing and coordinating the business’ entire transition from one owner to the next. A brokerage can act as the liaison between your lawyer, your accountant, the valuator and all other professionals that represent you or your buyer. The broker will also help prepare your business for sale by establishing a list of potential buyers and ensuring that a selected buyer is a good fit for the purchase. According to Jacqueline Fleischmann, Director of Business & Legal Affairs for ROI Corporation Brokerage, experience counts: “You want to identify a broker with proven expertise and a track record in your industry. Look for a brokerage that understands how an optometry practice is operated and managed. A good brokerage will be able to provide insight about current trends in the industry and how they translate to your region/location.” Brokers are typically paid a commission based on the final sale price. Jacqueline also says, “If a broker demands a fee up-front, this is a red flag.”

Brokers also help relieve business owners of much of the stress and time-consuming follow-up related to overseeing the business sale. Most buyers and sellers tend to have limited experience with these types of sales, and selling a practice that one has spent years to develop can be extremely stressful for business owners. Jon J. Walton, the General Manager of MBC Brokerage, says, “One of the most critical aspects of a broker’s job is to keep emotions of the seller and the buyer down. It is scary for all parties, and it is easy for them to get stressed out and unintentionally sabotage the sale because they allow their emotions to get the best of them.” By hiring a broker to oversee the transaction on the business owner’s behalf, the owner can continue to run the business as usual, or devote time to commitments other than what is already required for the business acquisition.


A professional appraisal is required to evaluate the business and establish a fair market value for it. This is done by examining its financial history and analyzing its ability to maintain its sustainability and profitability in the future, by examining it in the current economy, the economy’s projected future state, trends in the industry, the business’ current assets and liabilities and other factors relevant to the business. Although the seller almost always has an professional appraisal done as part of the preparatory work for establishing the sale, a buyer can choose to have their own appraisal done as well. This appraisal will also be required when applying for financing and most major financial establishments have strict requirements that appraisers must meet for the appraisal to be considered.

Certain brokerages like MBC Brokerage and ROI Corporation Brokerage also provide professionally-recognized appraisal services in addition to their regular role as business transaction brokers. Walton sums up the teamwork aspect of the sale very nicely: “Appraisers, brokers, lawyers and accountants all have different jobs, but we all work together to ensure everything is done properly for the seller or buyer… It’s not just about selling a business, but transferring and preserving a legacy”.


When you purchase a practice, you are not only investing money in the business, you will also be dedicating hard work and sacrifices in the years to come so you can allow it to grow and mold it to your vision of what it should be. As terrifying and exciting as that journey may seem, there’s no need to go at it on your own. With a trusted team of experts on your side, you’ll have the resources and the confidence to make good decisions, while dedicating your own time and energy towards your family, yourself and towards nurturing the business that fuels your dreams.


Lyanne Aguilar is a Toronto-based writer who specializes in finance and healthcare-related content, both in English and French


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