Team Up With the Right Professionals

By Charles L. Feitel

Charles L. Feitel Company

. http://medicalanddentalspace.com

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Team Up With the Right Professionals

Signing a lease for medical space may not seem like a significant part of a medical or dental practice, but depending on the size of the space it could constitute a liability well over $1,000,000 (a lease for 4,500 square feet at $32 per square foot over 10 years). I find it interesting that when medical professionals are analyzing lease options they will almost always hire an attorney, and usually retain an accountant. But who knows the real estate market better than a professional real estate broker?
Real estate brokers know the market rents, the competition and what a market deal is. Moreover, they have negotiated enough commercial leases to know what provisions in a lease are important and which are not as significant.
Common questions a healthcare professional will have are
What is the market rate?
What is a market escalation?
What is the difference and advantage to a full service lease compared to a triple net lease?
How much improvement money will the landlord be willing to give me?
What term lease should I take?
Will I have to sign the lease myself?
All of these questions individually may not be that significant, but in total they add up to a tremendous amount of money over the long term.
In addition to the economics of the lease, there are many other important issues. 1. How much parking is available for the doctor and their staff? 2. What time does the landlord turn off the heat and air conditioning? 3. When the lease expires who owns the improvements? 4. How does the landlord handle other expenses such as pass throughs, expense stops, etc. 5. Who is responsible for what? and 6. Can the tenant sublease or assign their lease?
The time to address these issues and questions is before the lease gets signed, not after. It is unfortunate how many times I have seen medical professionals suffer large losses or have to make a forced decision because of the way these questions were not addressed at the time the original deal was consummated.
Align yourself with a qualified, professional team early in the process. Give yourself plenty of time to make the right, thought-out decisions. Count on professionals to answer questions that could be extremely important in the long run. Remember, the decisions you make now are only going to be as good at the team you have working for you.