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.
Longer leases appeal to landlords for obvious reasons. They provide long-term stability and uninterrupted income.
Longer-term leases often apply to spaces known as shell spaces – those that will need to be specially fitted to meet the specific needs of a tenant. It takes time to recoup the costs of tenant improvements, and these are built into a long-term leasing plan.
That said, there are several positives to signing on for a long-term dental or medical lease. Doing so helps you hedge against rising rental costs, which can result in significant savings depending on the projected growth of your area. This is especially true if you know that you plan to be in the area long-term
Additionally, longer leases come with extra negotiating power. Expect leverage over tenant improvement allowances, signage, expansion rights and even the actual rental rate itself.
The Short End
If you’re after flexibility, are planning a move in future, or anticipate expanding or downsizing, then a shorter-term lease for your dental or medical office might be the better option.
While shorter-term leases may be more expensive up front, they give you the option of easily moving or adjusting your premises if your business requirements change. If you’re a new practice or are anticipating changes to your staffing levels or overall business model, then a short-term option can save you from the expense associated with breaking a lease.
Depending on the space, a shorter-term lease may also make more business sense than a long-term one. In slower markets or in situations where a space has been sitting vacant, you may be able to arrange a shorter-term lease at a competitive rate or on more business-friendly terms.
Spec suites, which are move-in ready spaces that have already been built out by the owner, can also be a cost-saving choice – although whether these are a viable choice for you will depend on the specific needs of your clinic.
Consult with an Experienced Broker
An experienced broker with expertise in the dental and medical space can be a tremendous asset when it comes to not only finding the right space but helping you negotiate and structure a lease for your business. With years of experience serving medical professionals, Gittleson Zuppas Medical Realty can help put you in the right space, and on the right terms.
If you’re looking to lease a new space for your dental or medical clinic and want to ensure that you’ll be in good hands, get in touch.