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.
Just Renewing? Time to Renegotiate
Time has passed, business is brisk, and it’s coming down to the wire. You know your lease is up for renewal… sometime. Maybe even sometime soon.
You have a space that you’re happy with, but you’re looking to cut costs or to make some improvements.
The problem is that you’re not entirely sure when to start the renewal process or who to even call. Plus, you want it handled properly. Upon renewing your lease, you’ll want to leverage the context of the market, mitigate risk, and minimize occupancy costs.
A good rule of thumb is to start the process one-year out. The longer you wait, the worse your renewal terms may be. By initiating discussions at least twelve months in advance, you allow for more options. Don’t wait!
Growing? You’re Gonna Need a Bigger Boat
Great news – you’re growing! But, you’ll need an office space that will grow with you. You don’t want to be bursting at the seams.
For the relocation process, we recommend giving yourself a lead time of about 12 months. The process may vary depending on your practice’s needs, but here is a brief breakdown of how we handle this process.
- First, we conduct a thorough analysis of your office structure, lease, and location.
- Then, we evaluate the operating expenses being passed through by your landlord and determine the pros and cons of your existing office space.
- After we’ve identified your needs, we prepare a detailed market survey of other opportunities.
- We schedule a tour, then review the best options and request proposals from your final selections.
- Then begins the process of negotiating the lease terms in order to achieve a mutually agreeable deal.
This process may then be followed by the build-out process if you plan on renovating.
To Build-Out or Not to Build-Out?
Depending on the space, you may want to build-out the space and make tenant improvements. While the length of time estimated for this process varies depending on the complexity, we recommend starting at least a year out from when you wish to move into your new space.
The build-out process includes space planning, designing, obtain permits, create engineering plans, building out, and final approvals. Don’t forget to leave time for installing lighting, equipment, technology, and anything else your practice may require.
Medical build-outs are a unique animal with their own set of unique challenges. So it’s important to assemble a team that is qualified and well-versed in a doctor’s needs for running a successful practice.
This team is often comprised of an architect, an attorney, a lender, and a construction manager to help you best navigate the sometimes-murky waters of leasing a commercial property. They will be able to advise you on what you can and can’t do to the property while you are leasing it.
One is the Magic Number
Ultimately, if you remember nothing else about this post, remember that “1” is the magic number. You need to allow at least one year to search out a great location, one year to initiate talks regarding renegotiating a current contract, and one year to either build-out to accommodate growth or look to move your practice elsewhere.
And if you need a friendly reminder of when you are one year away from the expiration of your lease—just click here. We are happy to help.