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:
Determine Your Bargaining Strength: Several factors will determine your bargaining strength with respect to negotiating a new lease. These include the overall vacancy rate of the building, recent tenant turnover, and your practice’s unit size in relation to the entire property (it is not only whether you occupy 1,000 or 5,000 sq. ft., but also what percentage of the building you occupy that counts too as you will be paying Common Area Maintenance / CAM costs based on that percentage). Your own business history is important as is your industry (doctors often make for long-term, stable tenants which commercial landlords greatly appreciate).
Ask The Right Questions: Who really owns the property, a local family or a distant pension fund? Who were the last two tenants (including anchor tenants) to move into the property – and out? Which tenants are not renewing their leases? Who is leasing month-to-month? Is the property currently for sale or expected to go on the market soon? Asking pointed questions such as these will help level the negotiating field as most leasing agents only volunteer one-sided information.
For a copy of our free CD, Leasing Do’s & Don’ts for Commercial Tenants, please e-mail request to JeffGrandfield@TheLeaseCoach.com.