For most practices, the cost of leasing office space is typically their second-highest expense after payroll. With this much at stake, it is imperative to achieve the best possible terms during new-lease or lease-renewal negotiations to maximize profitability.
Pitfall #2: Unawareness of less-common business points in a lease
Most healthcare professionals are familiar with the lease rate, length of term and build-out allowance provided by the landlord. What they may not know is there are many other important concessions available, such as:
- Free or reduced rent periods; both during and after build-out
- The right to transfer the lease to another practice owner in the future (Assignability)
- Options to renew the lease after the original term expires
- Death and disability termination options
- Exclusive use protection
- And many more…
Equally as important to know, there are landlord-focused clauses that can impair your practice’s ability to operate. Those clauses include relocation provisions, capital expense pass-throughs, electrical or mechanical requirements designed for general, non-healthcare uses and more.
While most healthcare providers are accustomed to helping others for a living and treating people very fairly, landlords typically stick to the letter of the law, as defined by the lease contract. If many of the important concessions are not properly negotiated or outlined, it can severely compromise the practice’s rights and quickly reduce profitability.
In addition to finding a desirable location and space, the greatest impact an agent can deliver to their client should be outlined in the fine print details of the contract. An effective agent should ensure no money was left on the table during negotiations and that their client was properly educated on additional considerations and landlord-focused clauses commonly found in commercial leases.
An expert healthcare real estate agent will not only save you time and money but will help you avoid missed opportunities and costly mistakes.
Check back soon for the part 3 of this blog to learn more about the next pitfall to avoid.
For more information about how you can maximize your profitability through your next real estate transaction, visit our FAQ page or click the following link to start a conversation with an expert agent representing healthcare providers in your area: Find an Agent