Keep, Expand, Relocate, or Exit? Reviewing the Clinics You Already Have
Before you size the next clinic, review the ones you have. Give every open location one of four verdicts: Keep, Expand, Relocate, or Exit. Base each verdict on five inputs (operating performance, physical constraints, capital needs, strategic fit, and lease dates) and attach a date by which it becomes an action. Run the review at least once a year, before the budget. Past four or five sites, run it every six months.
Most growth conversations I get pulled into start with a map and a question about where the next clinic goes. Ask a different question first: what are the clinics you already operate supposed to be doing next year? That review is cheaper than a market study, and it changes the answer to the Site 4 question more often than the leadership team expects.
I have watched a team spend six weeks and real money on market analysis for a new site while their flagship ran at 60 percent of its design assumption, with a failing HVAC unit and a renewal notice due in March. The information that would have surfaced all three lived in four different places, and no meeting on the calendar put those places together. Put one on the calendar. Here is how I run it.
How often do you review your existing clinics?
At least once a year, four to six weeks before you build the capital plan, so the verdicts feed the budget instead of following it. If you run more than four or five locations, run it every six months. With that many sites, a renewal notice window closes somewhere in the portfolio every few months, and a site that drifted for a year is a site you now have to fix on the landlord's timeline instead of yours.
Reopen a single site's page between reviews when something changes: a payer contract, a new service line, a landlord notice, a manager departure. The full review is scheduled; the trigger review is not.
What does the review produce?
One page per site. Five inputs, the evidence behind each, a verdict, and the date the verdict has to become an action. Keep it that small on purpose. The work is in forcing four separate views of the same clinic onto one sheet.
The four verdicts are Keep, Expand, Relocate, and Exit. You will be tempted to write a fifth, Wait. If you are waiting for a specific fact on a specific date, write that date down as the deadline. If you are waiting because the review was uncomfortable, it costs you: option notice windows close, the landlord gets less flexible as expiration approaches, and the sublease market for your remaining term shrinks as the term shortens.
Give every open clinic a verdict and a date, every review. Your renewal option has a notice window that closes 6 to 12 months before expiration in most of the leases I have negotiated. You agreed to that deadline when you signed the lease. Run the review early enough to decide before it closes.
What do you pull for each site?
Five inputs, each held by a different person. That is why you schedule the review: nobody's job includes assembling all five unless you make it one.
| Input | Who has it | What to pull |
|---|---|---|
| Operating performance | Finance and clinic managers | Visits per room per day against the design assumption. Provider utilization. Wait times. No-show and retention rates. Staff turnover by site. Contribution margin by site. |
| Physical constraints | Facilities lead or your GC | Room-constrained or provider-constrained. Deferred maintenance list. Systems age (HVAC unit, roof if it is yours, electrical capacity). Code and accessibility gaps. What the building cannot do that your other sites can. |
| Capital needs | Facilities plus your real estate lead | Cost to run the site at your standard for 3 to 5 more years: refresh, systems, any reconfiguration. Priced against the full cost of relocating. |
| Strategic fit | Founder and leadership team | Is the site still where patients, payer contracts, and staff are? Deepening this market or leaving it? Does it match the current prototype or is it the layout everyone works around? |
| Lease dates | The lease documents (not the abstract) | Expiration. Renewal option notice window. Holdover terms. Assignment and sublease rights. Restoration obligations. Any relocation or redevelopment right the landlord holds. |
Two of these need a note. On performance, look at turnover by site. When it concentrates at one location while the others hold steady, walk that building at 7:30 in the morning before you conclude it is a management problem. A break room that seats four when eleven people are on shift, no daylight in the clinical core, or parking that adds fifteen minutes to every arrival will produce turnover that reads as a manager problem for two years.
On physical constraints, answer room-constrained or provider-constrained first, because they have opposite answers. Room-constrained means the schedule is full and more rooms produce more revenue. Provider-constrained means rooms sit empty because you cannot hire, and adding square footage raises fixed cost against the same throughput.
On lease dates, pull the actual documents. People are repeatedly surprised at this step: the abstract someone typed in 2023 is missing the notice window, or two sites turn out to have deadlines in the same quarter. Put every date with a decision attached on one calendar for the whole portfolio. A diligence team will ask for that file first, so build it once and use it twice.
What does each verdict commit you to?
Write the verdict with its physical and financial consequence next to it, or it will not survive the budget meeting.
| Verdict | When it applies | What you are committing to | The deadline |
|---|---|---|---|
| Keep | The site performs and the building supports it. | Exercise the renewal option or ride the term. Fund the refresh and systems work in the year they are due. In my reviews this is the most common verdict and the one that gets underfunded, because a site that is working creates no urgency. | Renewal notice window, or the year the HVAC unit or refresh is due. |
| Expand | The site is room-constrained, and there is adjacent space, a second suite, or a reconfiguration available. | Rent on added space against throughput you can actually staff. Depends on the expansion rights you negotiated, or on a landlord with space that is not already leased for six more years. | The expansion option date, or before the adjacent suite goes to market. |
| Relocate | The building cannot do what the model now needs. | New build-out, a transition carrying two rents or a revenue gap, patient and staff attrition, restoration of the old space, and for a licensed program, whatever re-licensure the move triggers. Relocate only when the operating gain over the new term beats the transition cost with margin left over. If it is close, treat it as a no. | Expiration minus the time to find, build, and license the new site: usually 18 to 24 months. |
| Exit | The market or the site no longer fits and the capital is better spent elsewhere. | Close or consolidate. Your assignment and sublease rights decide whether the remaining term is a liability or a transferable asset. Restoration can run to six figures on a heavily built-out clinic. Patient transition planning starts months before the door closes. | Start the sublease or assignment conversation with at least 18 months of term left. |
What does this look like across three sites?
A composite from operators I have worked with. Read the three sheets side by side.
| Site 1: flagship | Site 2: opened 2024 | Site 3: acquired | |
|---|---|---|---|
| Performance | Best contribution margin in the portfolio. At capacity. | Below plan. Rooms empty. | Marginal. Market you would not enter today. |
| Physical | Room-constrained. HVAC unit at end of life, tenant responsible. | Provider-constrained: two clinician roles open for eight months. Building is good, layout matches prototype. | Legacy layout, outside the prototype. |
| Capital | HVAC replacement plus refresh. 1,400 SF adjacent space available. | None needed. | Restoration at surrender. No build-out worth funding. |
| Strategic fit | Core market. Deepening. | Core market. Deepening. | Would not enter this market today. |
| Lease dates | Renewal notice due March. | Seven years remaining. | Three years remaining. Landlord consent required for assignment. |
| Verdict | Keep + Expand into the adjacent suite if the landlord will deal, otherwise Keep with funded refresh and HVAC. March date governs. | Keep. Fix the hiring. Do not touch the real estate. | Exit at expiration. Start the sublease and consent conversation now, not with 12 months left. |
Site 2 is the verdict people find hardest to accept, because a real estate action feels like progress and a hiring problem does not. Site 3 is the one that gets deferred, because three years feels like a long time; with 12 months of term left, the space becomes much harder to place.
None of the three answers was "open Site 4," which is the decision the leadership team walked into the room wanting to make. Site 4 may still be right. Decide it after you know what Sites 1 through 3 cost and return next year, because adding a site while the existing ones are unresolved splits the same capital, leadership attention, and clinical staff four ways instead of three.
Why does this take a scheduled review?
Because the inputs live with different people. Finance has the P&L by site. The clinic managers have the operational reality, including the parts that do not reach a report. The facilities lead or the GC has the systems list. The lease terms sit in a folder that gets opened when a landlord sends a notice. The founder has the growth plan. Each person is competent and each holds a partial view. The review creates the job of assembling them, once or twice a year, and then releases it.
- Assign the five inputs per site. Give each input to the person who holds it, with a due date. Performance from finance and operations, physical from facilities, lease terms from the documents themselves.
- Build the portfolio lease calendar. Every expiration, option notice window, and landlord right, across all sites, on one timeline.
- Write the verdict and the deadline. One page per site. Keep, Expand, Relocate, or Exit, the evidence behind it, and the date it has to become an action.
- Roll the verdicts into the capital plan. Each verdict carries a number and a month. Feed them into the real estate budget before the growth line gets sized.
- Repeat on schedule, and on trigger. Annually at fewer than five sites, every six months above that. A payer contract change, a service line addition, or a landlord notice reopens that site's page early.
What are you giving up?
Four tradeoffs, each with a real cost.
Fixing a site against funding a new one. The new site is more exciting, more visible to the board, and usually a worse risk-adjusted return than a refresh or expansion at a location with proven demand. The counter is real: a portfolio that only reinvests stops growing, and capital markets and recruiting both respond to growth. Make the trade knowingly.
Relocating to a better building against the attrition and transition cost. The better building improves daily operations for the whole new term. The move is a front-loaded cost with a real chance of losing patients and staff who chose you partly for the location.
Exiting a weak site against the market presence it holds. A closed clinic is a visible retreat in a market you may want to return to, and referral relationships built over years do not reassemble easily. Sometimes holding a marginal site through the term is right for that reason alone. Write the reason on the sheet so it reads as a decision rather than an omission.
Running the review against skipping it. It takes real time from busy people and requires candor about locations that specific people in the room championed. That is the actual barrier, and skipping it defaults you to Wait.
Which of your sites would you sign again?
Capital, leadership attention, and clinical staff are all finite, and all three flow toward whichever site is loudest. A weak location consumes all three and starves the ones that would return more. Operations reports site by site and finance reports period by period, and neither format produces a verdict, so build the review that does.
Before the map comes out for Site 4, put one question to your leadership team. Knowing what you know now about the throughput, the building, the staffing, and the market, which of your existing clinics would you sign the lease on again today? Where the answer is a fast yes, that is probably where the next dollar belongs. Where it is slow, that site gets a verdict and a date this review.
Key takeaways
- Review every open clinic before you size the next one. Give each site one of four verdicts (Keep, Expand, Relocate, Exit) with a date by which it becomes an action.
- Run the review at least annually, four to six weeks before the capital plan. Past four or five sites, run it every six months, and reopen a single site's page whenever a payer contract, service line, landlord notice, or manager changes.
- Pull five inputs per site from the people who hold them: operating performance, physical constraints, capital needs, strategic fit, and lease dates from the actual documents.
- Decide whether an underperforming site is room-constrained or provider-constrained before touching the real estate. Both look the same on a revenue report and have opposite answers.
- Renewal option notice windows commonly close 6 to 12 months before expiration. Build one lease calendar for the whole portfolio so the deadlines arrive as decisions you scheduled, not as landlord notices.
Frequently asked questions
How do you decide whether to renew, relocate, or close a clinic location?
Pull five inputs for the site: operating performance against the design assumption, physical constraints and systems age, the capital needed to keep it at standard for three to five years versus the full cost of moving, strategic fit with where patients and payers are going, and the lease dates. Then assign one verdict (Keep, Expand, Relocate, or Exit) with a deadline. The approach I use at Retained CRE is one page per site, reviewed before the budget.
How often should a healthcare operator review its existing clinic locations?
At least once a year, four to six weeks before the capital plan, so the verdicts feed the budget. Operators with more than four or five locations should review every six months, because a renewal notice window closes somewhere in the portfolio every few months at that scale. Reopen an individual site's review when a payer contract, service line, landlord notice, or site leadership changes.
What does it cost to relocate a clinic?
New build-out for the replacement space, a transition period carrying two rents or a gap in revenue, patient and staff attrition, restoration of the space you are leaving, and for licensed programs, re-licensure at the new address. In Retained CRE's site reviews, Relocate is the verdict only when the operating improvement over the new lease term clearly exceeds the transition cost. If the math is close, it usually means Keep and fix the building.
How far in advance do you need to decide on a clinic lease renewal?
Renewal option notice windows commonly close 6 to 12 months before expiration; miss the window and the option is usually gone. Make the Keep-or-leave decision before that date, which means the site review has to run several months earlier. If the answer is Relocate, start 18 to 24 months before expiration to find, build, and license the replacement.
Reviewing Your Sites Before Adding One?
I run the site review with founders and their teams: five inputs per clinic, one verdict each, and the dates by which each verdict has to become an action.
Schedule a ConversationRenewal options, holdover, assignment, and restoration are the clauses that decide what each verdict costs. What You're Actually Signing grades those and 22 others.
