The HPRG Blog
The HPRG Blog
With over 20 years of experience, we take the hassle out of finding new dental space for lease and for purchase. You're busy running your practice, so let our team do the heavy lifting for you. Don't go it alone!
Charles Feitel

8 Mistakes Dentists Make When Leasing Their First Office Space (Part II)

8 Mistakes Dentists Make When Leasing Their First Office Space (Part II)

8/1/2019 4:51:03 AM   |   Comments: 0   |   Views: 25

4. Not Choosing the Right Area

A common mistake of first-time practitioners is selecting a location before they know which kind of patients they want to attract. This is backward. Choose the type of patient you want to work with first, and then choose a location.

Because then, you can look for a geographical area that has people who fit your target demographic. You'll end up with a steady stream of precisely the kind of patient with whom you want to work. Before doing this, you'll have to put together an ideal patient profile. Your tenant rep can help you with this. 

Ask yourself what kind of patient you want to target. Is it going to be men or women, young or old, blue or white-collar? 

Of course, if you own an elective practice, part of your demographic research will be to look at income and education levels in the area you're considering.

After figuring out exactly who your ideal patient is, pick at least three geographical areas in which to look.

The U.S Census Bureau has a super useful site for conducting demographic research: You can also glean rich demographic information from newspapers, Chambers of Commerce, and local, state, and city governments in each region. Try to get statistics on household incomes, age distribution, blue-collar vs. white-collar, race and ethnicity, and education.

Map these by areas in the cities or towns you're considering. Then, determine whether these regions are growing or shrinking. Try to find communities that are growing. This way, you'll be serving an ever-increasing customer base.

5. Not Understanding Lease Types

 If you don't understand the different types of leases, you won't know which one is most advantageous to you.

Gross Leases

 A gross lease means the tenant pays one lump sum for his rent, including utilities and janitorial services.

The landlord then deducts his expenses. If you're negotiating a gross lease, ask which janitorial services the landlord provides and how often you'll get them. Sometimes, the tenant has to pay for electricity usage beyond an agreed-upon amount.

With a gross lease, the landlord assumes all responsibility for the building, while tenants concentrate on growing their practices. It's supremely easy for the tenant, who can forecast expenses without worrying about unexpected charges.

Net Leases

 Net leases are the opposite of gross leases.

In a net lease, a tenant pays base rent and some of the maintenance costs, taxes and insurance for a property. These include such expenses as real estate taxes, property insurance, janitorial services, property management fees, sewer, and water.

There are several types of net leases:

  • Single Net Lease (N Lease): The tenant pays one operating or maintenance expense.
  • Double Net Lease (NN Lease): The tenant pays two operating or maintenance expenses. 
  • Triple Net Lease (NNN Lease): The tenant pays three operating or maintenance expenses.

Even with these breakdowns, the actual definition of a net lease is dependent on the details of each contract.

Net lease expenses can fluctuate from month to month and year to year as operating expenses increase or decrease, making expense forecasting tricky.

Modified Gross Leases

The modified gross lease (sometimes called a modified net lease) is a combination of the two. The rent is paid in one lump sum and can include any of the nets. Tenants and landlords will have to decide which of the nets to include in the base rate.

The modified gross lease is popular with renters because its flexibility makes it easier to negotiate an agreement.

Total Blog Activity
Total Bloggers
Total Blog Posts
Total Podcasts
Total Videos
Townie Perks
Townie® Poll
Have you taken any endo-related CE this year?

Sally Gross, Member Services Specialist
Phone: +1-480-445-9710
©2020 Dentaltown, L.L.C., a division of Farran Media, L.L.C. • All Rights Reserved
9633 S. 48th Street Suite 200 • Phoenix, AZ 85044 • Phone:+1-480-598-0001 • Fax:+1-480-598-3450