5 Underrated Considerations Before Signing Your Next Lease
For healthcare tenants, choosing a property is about much more than just the lease rate.
Location is critically important for healthcare providers, and many are moving services closer to where their patients live, work, and even shop to create the most convenient overall experience. (In fact, data from the Future of Family Medicine Project noted that patients consider “convenient location” as one of their top five criteria for selecting physicians, and that’s typical across a variety of healthcare industries.)
But there are many things beyond location to consider when making real estate decisions. Some are obvious, like lease rates and length, but others are less so. To make sure you’re bearing in mind the full client experience (and your bottom line), don’t miss these underrated considerations when signing your next lease.
Healthcare-Tailored Spaces
Whether you’re a veterinarian who needs a surgery suite, relief area, and private exit or a dentist who may require operatories, a laboratory, and sterilization area, the location you choose will need to be tailored to your practice. Does the space have sufficient power to run your equipment and technology? Are there restrictions for certain types of healthcare uses? Is there sufficient HVAC supply to recirculate the air at the desired rate for a healthcare practice? Is there emergency access to the office space? If there are elevators, are they operational 24 hours a day?
Why it’s important: All these factors can play a role in the success of your practice. And if something isn’t available, remember, your agent can negotiate concessions. These might include money for tenant improvements specific to your practice’s needs, lengthy build-out periods to support your design, permitting, and construction timelines, and even free-rent periods once your space is ready for occupancy. The concession negotiations are highly specialized and very unique to your practice.
Parking Availability
Inconvenient, limited, or inaccessible parking can be major points of friction for patients. Adequate parking for high-volume practices means access to about 5-7 parking spaces per 1,000 square feet of occupied space. Once you determine whether the available parking is sufficient, you should determine whether the type of parking suits the needs of your patients. For instance, does the location have access to parking 24 hours a day? Is it a parking lot or garage? If the building has access to a parking garage, are discount parking validations available for patients? What’s the accessibility like for patient drop off? What’s the traffic flow like in and out of the property, development, and area?
Why it’s important: Parking is a big deal, and the patient’s first impressions of an office visit, its convenience, and its accessibility will help form their opinion of your practice.
Visible Signage
As healthcare providers, signage and exposure can drastically impact your business—we’re talking building, monument, and even internal directory signage. While First-and-Main exposure might not be necessary for every practice or specialty, visibility and signage is a huge plus and should be a consideration in your search. So what does the exposure look like at the locations you’re considering? Will potential patients or customers drive or walk past your practice signage on a daily basis? In addition to branded signage, does the location offer easily identifiable road signs, cross streets, or landmarks nearby? If the space has been developed with high-traffic flow in mind, it might make it easier for potential patients to access and find your office.
Why it’s important: For medical practices, well-placed signage can generate additional exposure, customers, and revenue. Equally important is ease of accessibility—assisted by well-planned street signage—which can help smooth the patient experience (someone who’s frazzled because they couldn’t find your office is not starting their appointment or new relationship well).
Retail or Medical Office Building Neighbors
If you’re debating between a traditional office space, a retail or shopping center, or locating inside a medical office building, consider the range of tenants who might drive traffic near your space—and how that could impact your practice. Beyond offering market knowledge, property viewings, and negotiation, your healthcare real estate agent should also take a deep dive into what potential patient traffic looks like at each location you consider.
Why it’s important: Might restaurant patrons, grocery store shoppers, or other service-based business-goers be potential patients of yours? If so, retail spaces may provide you with more visibility to potential patients. Would stores in the retail center you’re considering also be of interest to your patients? If so, that might be an added convenience for patients to frequent neighboring retailers and businesses in the same trip. Likewise, neighboring healthcare providers can be excellent referrals sources of new patients in a healthcare building or plaza.
Usable vs. Rentable Square Footage
Usable Square Footage (USF) is the size of the space you’ll actually occupy as a tenant, while the Rentable Square Footage is your occupied space plus a portion or percentage of the property’s common areas, such as hallways, public corridors, restrooms, etc., that you’ll pay rent on. The cost of the common areas are often divided on a pro-rata scale among the building’s tenants at about 1 – 1.2 percent of the usable square footage cost.
Why it’s important: One common mistake tenants make is mistaking the RSF number advertised (which includes common areas) for the USF they hope to have in a space. The difference can be substantial if your design is off by 20%, so be sure to clarify the number before wasting time evaluating spaces that are too small for you.
To move forward confidently with a lease decision, hire a healthcare real estate professional who knows the nuances of the industry in relation to your specialty, and can ensure you’re maximizing profitability on your next real estate decision.
CARR is the nation’s leading provider of commercial real estate services for healthcare tenants and buyers. Every year, thousands of healthcare practices trust CARR to achieve the most favorable terms on their lease and purchase negotiations. CARR’s team of experts assist with start-ups, lease renewals, expansions, relocations, additional offices, purchases, and practice transitions. Healthcare practices choose CARR to save them a substantial amount of time and money; while ensuring their interests are always first.
Visit CARR.US to learn more and find an expert agent representing healthcare practices in your area.