Pacific Northwest Market Update

The dental practice transition market in the Pacific Northwest (PNW) has been dynamic over the summer, with trends in buyer activity, staffing, and practice demand reshaping the landscape for both sellers and buyers. As we approach the end of the year, several key developments stand out in the PNW.

1. Staffing Continues to Be the Top Challenge

Staffing, particularly the shortage of dental hygienists, remains the most significant challenge for many dental practices. Practices across the PNW are feeling the pressure of an increasingly competitive job market, which has driven wages up and made recruiting top talent extremely difficult. Hygienists, in particular, are in short supply, and this issue is affecting practice scheduling, production and growth potential. Practices with a well-established, consistent team are in higher demand, while those struggling with turnover may face longer transition timelines or lower valuations.

2. Buyer Activity

Despite ongoing staffing challenges, buyers have been highly active, especially during the past summer. The recent reduction in interest rates has created a favorable environment for financing, encouraging individual buyers to pursue new opportunities. There’s no indication that this momentum will slow down, as both individual buyers and larger organizations continue to seek quality practices.

Historically low interest rates are reducing the cost of borrowing, which is helping more potential buyers enter the market. This trend is expected to continue into the foreseeable future, making now an excellent time for sellers to capitalize on the heightened demand.

3. DSOs and Regional Groups Targets

Dental Service Organizations (DSOs) and regional groups have been particularly active in the PNW market, especially for practices generating more than $1.5 million or more in annual revenue. DSOs are seeking practices with solid profit margins, strong reputations, and the ability to scale further.

However, it’s important for sellers not to get too caught up in the DSO noise. While DSO activity is strong, individual dentist buyers are still plentiful and looking for high-quality opportunities. In fact, the supply of individual buyers remains robust, with many motivated dentists eager to own their own practice and continue the tradition of independent practice ownership. Sellers should remain open to both options, as a competitive market exists on both sides.

4. Good Practices in PNW Cities Are in High Demand

Practices in major cities such as Boise, Missoula, Bozeman, Kalispell, Tri-Cities and Spokane are in particularly high demand. Buyer inquiries for urban practices are outpacing the availability of listings, creating a seller’s market in these areas. Good-quality practices with stable revenue, modern technology, and solid patient bases are moving quickly, often attracting multiple offers.

For sellers in these urban areas, the current market conditions present an excellent opportunity to command strong valuations and negotiate favorable terms. Buyers, on the other hand, are facing increased competition, necessitating swift action and preparation when a suitable practice hits the market.

5. Rural Practices Offer High Profitability

While rural practices in the PNW tend to be more profitable, they often take longer to transition due to a smaller buyer pool. Rural practices typically have lower overhead and more loyal patient bases, which can result in higher profit margins. However, these practices can sit on the market longer, as fewer buyers are willing to relocate or take on the challenges of living in a rural environment.

For sellers in rural areas, patience is key. The right buyer will recognize the potential in these high-profit practices, but finding that match can take more time compared to urban settings. Buyers looking for high returns with less competition should consider rural opportunities, as these practices often provide excellent financial rewards.

6. DDSmatch: A Powerful Resource for Dentists

With more than 17,000+ buyers nationally, DDSmatch plays a pivotal role in the dental transition market. Functioning much like the MLS in real estate, DDSmatch is the largest site to date for owners listing practices and for buyers seeking opportunities. Sellers looking to transition can benefit from the expansive network DDSmatch offers, connecting them with qualified buyers locally, regionally, and nationally.

For buyers, DDSmatch provides access to a wealth of listings, from urban to rural practices, offering a wide array of choices depending on their preferences and career goals. Sellers partnering with DDSmatch can leverage this extensive platform to maximize visibility and ensure their practice is seen by the right buyers.

Conclusion

The Pacific Northwest dental market is thriving, despite the challenges posed by staffing shortages and the competitive landscape. Whether you’re a seller looking to transition or a buyer seeking new opportunities, the current market conditions present both opportunities and challenges. Practices in urban areas are in high demand, while rural practices offer profitability but require patience during the transition. With recent interest rates favoring buyers and DSOs actively seeking high-revenue practices, there’s no shortage of activity. By leveraging platforms like DDSmatch, both buyers and sellers can navigate this evolving market and achieve their goals, staying in control on their terms.

John Waco

DDSmatch Pacific Northwest