Many healthcare practices, including dentists, optometrists, veterinarians, and physicians, generally know that having an experienced attorney help with their commercial lease is a good idea which is why we assist so many of our clients with their lease renewal. What you may not realize is that it is also important to have a commercial broker help you with the lease renewal process as well.
A commercial broker is someone who specializes in negotiating with your landlord as you work through your lease terms. Having an experienced commercial broker helps you with your lease negotiation, ensuring that you are getting the best deal possible for your renewal.
Commercial brokers do a lot of the legwork for you during this process so that you can focus on your patients instead of lease negotiations. They will research the market that would affect your ability to move locations. This knowledge and expertise can be a huge advantage when it comes to altering the terms of your lease.
Landlords will also use commercial brokers as well. By using your own commercial broker, you effectively level the playing field when negotiating with your landlord.
There is undoubtedly some value in staying in the same location as a healthcare practice. Patients know the location, and they are comfortable knowing where to go. You have likely tailored the space to meet your needs, including adding improvements and equipment necessary for your practice. Moving would be time-consuming and expensive. It may even have a negative effect on your existing patients.
Landlords understand that there is significant value in staying put, particularly for healthcare practices—and they use that realization to their advantage in lease negotiations. A landlord is much more interested in raising rental rates instead of getting lost in the romance of keeping an existing tenant.
A commercial broker helps combat a landlord’s simple desire to raise rates regardless of the corresponding rental market. For example, a commercial broker will often do some extensive research and investigate an accurate market value for the lease of a particular property. They can use that information to negotiate with your landlord more effectively and develop a strategic plan with you to keep your rates low well into the future. They may even be able to compare the deal offered to you with deals completed within your building or in comparable buildings. More importantly they can also discuss whether it makes sense to purchase a building and move your office.
A commercial broker in your area will have their finger on the pulse of commercial leases in your area. Perhaps the most valuable contribution they add to your transaction is this in-depth knowledge of an appropriate lease price for your area.
As part of that knowledge and understanding, a commercial broker will often be able to add the following benefits to the transaction.
A commercial broker will research market values and negotiate the lease on your behalf. They will review the terms and walk you through what is appropriate in your situation. They do all of this work—and you do not have to lift a finger, other than to consult with your commercial lease broker about your goals for the transaction.
Working with a commercial broker gives you more time to focus on your business. You do not have to spend hours looking at comparable properties or agonizing over the appropriate way to negotiate the price you want. Your broker will do all of that work on your behalf, and you can be as involved as you would like to be.
Many doctors make the mistake of assuming that the only terms in the lease that matter are related to the rent price. However, many other terms might be beneficial to you that you may not have considered. Improvement allowances and concessions that apply under specific circumstances are both good examples of these more tailored lease terms.
For instance, if you want to create a concession for improvements, your broker will often be able to tell you what kind of compromise is standard for the type of work you are doing. You can even decide what kind of money you want to spend to do your remodel based on this information.
One of the benefits of using a commercial broker is that they can feel out the landlord on your behalf. They can not only negotiate for you, but they can also calculate the landlord’s financial goals for the property. Knowing the point where the landlord makes money over and above the mortgage, maintenance, and other costs will be critical information to have in a negotiation.
You may not realize the nuances of certain lease terms and how they might affect your practice. Any section the restricts your freedoms or imposes obligations should be reviewed carefully and limited as much as possible. Example problem areas might include:
You might not realize that there could be a problem until a trained eye reviews it and points out the potential issue to you. An experienced commercial broker will be able to flag these potential problem areas for your review.
Hiring a broker often provides a significant return on investment. In fact, on average, a broker can save you up to five times what you would be able to negotiate on your own. The best part is that the landlord is the one that pays the broker, so you don’t have to worry about that either.
The average attorney also might not understand what doctors need in their lease. A dentist or physician, for example, is going to have very different needs compared to an accountant or a retail tenant. An experienced broker will help you address the specific lease terms that you need for your practice.
Dental & Medical Counsel is unique because it offers real estate services and has the legal experience you need as a dentist, physician, veterinarian, or optometrist. We have years of involvement in leases that professionals like you use.
We can put that knowledge to good use for you, regardless of whether you want to use our office as a stand-alone attorney or in conjunction with a commercial lease broker. Contact Dental & Medical Counsel to set up a complimentary consultation with Ali Oromchian to learn more about how we can help you negotiate your lease renewal and finalize your lease.
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