Choosing the Building Type That Best Suits Your Needs – For Physician Tenants

Updated on January 19, 2022

Dale and Jeff - Back to BackBy Jeff Grandfield and Dale Willerton – The Lease Coach

Finding the right location or building for your practice is one of the most important decisions you can make; however, it’s not always easy to figure out where your practice will do best. You can find the same types of businesses in strip malls, light industrial spaces, and in old quaint downtown houses. Why choose one location over another?

As we explain in our new book, Negotiating Commercial Leases & Renewals FOR DUMMIES, too many business-owners (including physicians) take a “shoot-first, aim-later” approach to choosing the right property for their business. What makes two tenants want to locate in vastly different types or extremes of properties? The reasons are many:

Available space: You can only put your practice in a building that has space available for lease. And, if a competing or similar-use business to yours has already located in that property, then the landlord may not want two of you in close proximity. If the medical services you offer are already taken in a particular building, you may need to go farther afield to find a location available for your use.

The hours you plan to keep: When can patients schedule appointments to see you? Will you be open Monday through Friday only or Saturdays as well? Will neighboring businesses to you be open at the same time as you? For example, a patient may well like the idea of grabbing a coffee from the coffee shop next door to drink while waiting to see you.

Long-term potential: Ideally, a physician tenant should pick a suitable location that they can successfully operate their practice from for 10 to 20 years. Far too often, we see tenants moving several times over the years as they realize they initially chose the wrong location, the wrong unit within that property, or the wrong size space within the building. These mistakes are costly and can be avoided by having a long-range vision for their practice.

When it comes to evaluating various building types, understand that not all buildings or properties are created equally. Each property has unique aspects to factor in to your decision. Here are a few options of building types which could prove to be suitable for your needs:

Retail Strip Plazas: Typical unit sizes in strip plazas are around 1,200 square feet, depending on the depth of the property. Most strip plaza tenants want at least 18 to 20 feet of frontage (width) for maximum visibility. The type of strip mall or plaza you select for your practice and its location will determine how far you can expect your patients to travel to see you. Typically, consumers like to do multiple tasks when shopping … they may combine an appointment with you with grabbing some groceries, picking up the dry cleaning, and stopping at the bakery (all while remaining parked in the same parking spot). End Cap units (those located on the ends of the plaza) are the most valuable units for lease. These often house a 24-hour convenience store, quick-service restaurants, or a drive-through coffee shop but they can work for physicians as well as end cap units often have more parking adjacent to them and can display signage on both sides of the commercial unit.

Unanchored strip plazas: Fewer shoppers visit unanchored strip plazas and, therefore, rents are usually lower than anchored strip plazas. These plazas may be L-shaped and house between five and seven tenants (typically including a convenience store, a coffee shop, a dry cleaner, and a healthcare professional). Unanchored plazas are also located in and scattered around communities.

Anchored strip plazas: These can be very advantageous to locate in as anchor stores can draw customer traffic to a plaza. With this being the case, a landlord may often offer an anchor tenant a sweet lease deal because of the reciprocal benefit to the other regular tenants and the landlord. In addition, the landlord may charge the regular tenants a higher rent for these properties. If the anchor tenant is set off in a separate building and parking lot this will less advantageous for the rest of the tenants. Ideally, the anchor tenant will physically comprise part of the plaza and share a common parking lot (so as to make walking from store to store much easier).

Office buildings: Physician tenants can choose from simple one-story buildings right up through downtown highrise properties. The availability and cost of parking will be major factors for you … consider your patients who may be seeing you for more lengthy appointments and cannot simply run back outside to plug more money into a parking meter.

Stand-alone buildings and pad sites: A stand-alone building can be situated on a single parcel of real estate or locate on a multi-tenant piece of land. Leasing opportunities exist for stand-alone buildings where the landlord has designated certain pad areas for stand-alone tenants. Some physician tenants lease a pad site for a 20-year term and construct their own building – essentially only paying rent on the land. If this is the case, and the physician is spending their own money to construct the building, the key is to have a long 20-year lease term with renewal options in order to have enough time to recapture their investment.

For a copy of our free CD, Leasing Do’s & Don’ts for Commercial Tenants, please e-mail your request to [email protected].

Dale Willerton and Jeff Grandfield – The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Dale and Jeff are professional speakers and co-authors of Negotiating Commercial Leases & Renewals FOR DUMMIES (Wiley, 2013). Got a leasing question? Need help with your new lease or renewal? Call 1-800-738-9202, e-mail [email protected] or visit

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The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.