As a physician, the lease on your space is one of your largest overheads. But your anticipated costs can vary dramatically depending on the size of your practice and the equipment and technology you require on-site to fulfill patient needs and expectations. Let’s take a look at how your specialty can affect the terms of your lease.
A Larger Footprint Typically Entails a Higher Lease
Your specialty will influence the size and use of your medical office space, which in turn affects your lease. A solo family practitioner may only require a small space with a reception, admin area, and a handful of consulting rooms, while a larger group practice will need break rooms, spaces for the individual practitioners, and potentially on-site labs, imaging, and testing facilities. Physiotherapists will need open, spacious setups designed to take patients through recovery exercises, while surgeons such as dermatologists may be able to work within a smaller footprint.
While generally the larger the space, the higher the lease, there are some caveats. High-traffic practices tend to see higher leases due to the resulting wear and tear on common spaces and the investment in maintenance this entails. Location is also a factor. Some smaller clinics, especially more niche specialties such as neuro-ophthalmologists, may need to be strategically positioned close to medical center hubs in larger cities, while others can be successful in a less central and therefore less expensive area.
Some Specialties Require Extensive Updates
Another key factor that can impact the terms of your lease is the kind of improvements required of your space. A general practice focused on patient consultations and that outsources testing and imaging requires minimal updates and renovations – requiring less financial input from the landlord and more straightforward lease terms. In contrast, dentists, surgeons, and oncologists may require extensive updates and remodeling to ensure a space is able to meet requirements for imaging, testing, surgery, and treatment. A landlord will often help cover at least a portion of these costs, but the resulting lease may be structured over a longer timeframe and typically with multiple options for renewal to help amortize the high upfront costs.
Specialists can help reduce lease-related overheads by moving into a space already appointed to suit their particular needs – for example, a dentist could move into an existing dental clinic – or by agreeing to a longer-term lease. Subletting out rooms or suites within a larger space (if allowed) can also help manage leasing costs, as can leasing a space owned by a hospital or larger medical group.
Your Specialty May Affect Termination Rights and Guarantees
Finally, there are specific contract terms that may pertain to you as a specialist. For example, an exclusivity clause that prevents a landlord from leasing a space on-site to a competing healthcare business may be vital for highly specialized practices such as surgeons or imaging centers, but less so for family doctors. Personal guarantees showing a person or practice is in good financial standing may also be required of individuals or smaller clinics to ensure that the landlord is protected if something happens to the business or individual who is the face of the business. These, along with termination rights, are particularly relevant to solo practitioners and those leasing from larger groups such as hospitals. Religious directives may also be written into the lease for practitioners working within medical spaces owned by religious organizations and may affect certain specializations more than others.
Expert Input Can Help Ensure Your Lease Works for You
At Gittleson Zuppas Medical Realty, we have decades of experience connecting healthcare practitioners with medical spaces of all kinds, and we understand the specific needs of your specialty. Whether you’re a property owner looking to fill a space, or a practitioner seeking that ideal location, we can help you negotiate the lease terms that will position you for long-term success.