When was the last time you renegotiated your lease for your practice? Have you ever? How’d it go?
Negotiating your lease to fit the needs of your healthcare practice is a key component of running a successful practice. Lease terms, whether during the entrance of a lease or a renewal, should always be seen as a starting point.
Confidently renegotiating terms can lead to lower lease costs, open doors for an expansion of your practice, money to update your space and more. Knowing how to avoid these lease negotiation pitfalls will allow you to negotiate without fear.
If you’re a medical practitioner wishing to avoid the challenge of building your own medical practice from the ground up, you may consider purchasing an established medical practice. Buying an existing practice lets you step into an already validated business and focus on running your business rather than getting it started.
Here’s how to go about purchasing an established medical practice.
If you’re looking for a new space for your dental or medical practice, lease length is one of the many factors you’ll want to consider. It’s common for lease lengths for dental and medical spaces to be longer than those for regular office spaces: think 7-10 years instead of 3-5.
However, lease lengths can vary depending on current market conditions, current vacancies and planned development for a given space. Negotiation can also play a key role in netting the right space at the right terms.
Let’s take a look at the pros and cons of opting for a longer- or shorter-term lease, and which is best for your situation.
To be frank, a medical build-out is nothing to blink your eye at. It can be a pretty penny. Healthcare facilities are unique in their needs, and you don’t want to cut any corners.
Upon executing the lease of your space, you have a couple of options as you’re selecting your site. You can move in as is (maybe with some tenant improvements), you can do a partial renovation, or you can do a custom build-out. Constructing from scratch means that you get complete control over the office layout, style, function, etc. But a custom build-out also comes with the longest lead time and highest price ticket.
If you decide to go the custom build-out route, make sure you understand the project timing, process, cost and details before you begin. Here are some tips from some guys that have seen a medical build-out or two…
When it comes to the world of commercial real estate, there are a couple of types of cooks in the kitchen. Office, retail, and MOB (Medical Office Building) all fall under the umbrella of commercial real estate. What is the difference between them, and the pros and cons of each route?
Office spaces can be a great option for your medical practice location. These types of spaces usually offer better lighting, lower costs, and greater assistance and maintenance from landlords. The traditional business setting can also lend a sense of credibility or comfort to your patients.
If you’re opening a new medical practice, moving locations or expanding, you might be considering a turnkey office space. Turnkey spaces are those that have been completely outfitted and are ready for you to move right in upon signing a lease or making a purchase. In theory, all you need to do is “turn the key” and enter. However, it’s not always that simple.
Here’s what to think about when deciding to proceed with a turnkey medical office space.
Healthcare systems used to think about real estate in terms of finding four sturdy walls and a roof that fit their bottom line. But, in 2018, healthcare executives are becoming increasingly strategic in their real estate decisions, labeling it as a high priority.
The factors that have spurred this shift are lower reimbursements, the entrance of nontraditional healthcare delivery and the aging population. Healthcare executives are now making it a top priority to control costs, improve efficiency and increase returns on their real estate investments.
Healthcare real estate is no longer strictly a liquid asset that is managed to increase cash flow and free up capital for other projects. Now, healthcare real estate is seen as a way to improve the sustainability of operating margins.
As the adage goes, “Timing is everything.” This applies to real estate as well, especially when you are searching for that perfect place for your medical practice to call home.
How do you know when to start? You don’t want to be the little piggy that went to the market too early or too late. Too early, and landlords or sellers may not negotiate with you yet, or they’ll expect you to be ready to move forward immediately. Too late, and things get real expensive real fast.
The reality is that most people underestimate how long it takes. Set yourself up for success by understanding how long different transactions take. Here’s a breakdown of timelines for the most common situations and how to navigate them.
You wouldn’t perform surgery on yourself, would you? Whether you’re negotiating a lease renewal or looking for a new space, believe it or not, you won’t save money by eliminating the middleman. In fact, you may cost your practice more.
Another thing to keep in mind is that there is a commission pool built into most lease deals comprised of rental funds. If you don’t hire a broker to represent you, the landlord’s broker or leasing agent will take the full commission. If you are represented, the fund is shared with your broker or agent. Either way, the commission comes from the pot, not your pocket.
After years of hard work, it’s time to expand. You’re a successful medical or dental practice and you’ve decided it’s time to lease new office space. Because it’s one of the largest expenses, choosing the right office space is a major decision that can impact your practice in multiple ways. The following five questions are a great place to start.
1. How much space do I need?
Having the wrong-sized space – either too big or too small – is the biggest pitfall. So, first, ask yourself if you’re downsizing or planning for continued growth. To assist in determining your current and future needs, you may want to enlist the services of an architect to help with your decision making. They will be able to evaluate your current office, gauge your likes and dislikes, and determine the inefficiencies that may occur from your current design. Just as important is choosing an architect that knows medical design and current practice trends and one that will understand your unique office flow.
Finding the right medical office space is a different process for every practice. Some choose to lease, some choose to buy. There is no right or wrong answer in either direction, it really boils down to your specific needs and comparing the pros and cons accordingly. With that said, it may be helpful to ask yourself a few questions and make a list of your comparisons. Let’s talk leasing first.
Although GZ makes every effort to ensure the accuracy and reliability of the data contained herein, GZ makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or completeness of the data.