For many healthcare tenants, negotiating a good lease or lease renewal against an experienced agent or landlord can be a challenge. While a doctor focuses on proper patient care, savvy real estate agents and brokers are specialized sales people. Their job is to sell tenants on leasing their location at the highest possible rental rate.
As explained in our new book, Negotiating Commercial Leases & Renewals FOR DUMMIES, tenants may go through the leasing process only two or three times in their entire lifetime – yet they have to negotiate against seasoned professionals who negotiate leases every day for a living. Negotiating appropriate leasing terms is vital for a doctor as the amount of rent he pays will directly affect the practice’s financial bottom line.
Whether you are leasing a new location for the first time or negotiating a lease renewal for your practice, these are some money-saving tips for healthcare tenants:
Ask for More Than What You Want: We remember a tenant who came to us hoping we could negotiate a $500.00/month rent reduction for her business. During the ensuing months, we met with the landlord and insisted on a $1000.00/month rent reduction. Eventually, our efforts paid off with an $800.00/month rent reduction or approximately 25% less. Ask for more than what you want or need when negotiating other terms too (such as free rent, signage, leasehold improvement money, etc. The worst the landlord can say is No!
Calculating Market Rents: Landlords and leasing agents will often justify their price per square foot as market rent or prevailing rent. Today, much space is leased by category – that is, daycare centers pay less than pharmacies that pay less than hair salons and so on. In most office buildings, rates are more consistent and market rents can be more easily established. Don’t be fooled. Many deals we negotiate for tenants end up coming in well below the so-called market rents.
For a copy of our free CD, Leasing Do’s & Don’ts for Commercial Tenants, please e-mail request to JeffGrandfield@TheLeaseCoach.com.
Jeff Grandfield and Dale Willerton – The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Jeff and Dale 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 DaleWillerton@TheLeaseCoach.com or JeffGrandfield@TheLeaseCoach.com or visit www.TheLeaseCoach.com.