Whether or not you have ever played poker, you’ve likely heard the term “having the deck stacked against you”. This phrase is used for explaining how an unexperienced or unsuspecting player gets taken advantage of by a more experienced player. When someone knows more than you do, and when they hold the cards to the game, it becomes challenging (or even nearly impossible) to get a fair shake. And while one hand of cards might not impact your livelihood, one bad practice or real estate negotiation certainly could.
Your practice’s real estate is typically the second-highest fixed expense on your balance sheet. If you enter negotiations without proper representation, then the deck is already stacked against you. To then bluff your way through a transaction, hoping that you’ll get a fair deal is a blueprint for disaster. Those missteps could cost you tens-to-hundreds of thousands of dollars. With that large of a line item a stake, it’s important to approach your office space negotiation with market intel, a proven strategy, and experienced representation in your corner.
Let’s look at how you can turn the table back to your favor when it comes to negotiations.
To effectively win at poker or any card game, you first need to have access to the right information. You need to know the rules of the game, you ideally want to know who you are playing against, and you certainly need to watch the other players, so that you know what moves make the most sense. In the same way, the right intel and information can mean the difference of tens of thousands of dollars through lowered lease rates and increased concessions for your practice real estate.
Gaining access to market lease and purchase comps, along with intel on concessions like free rent, build out time, tenant improvement allowances, etc., gives you the power position in the negotiation. You know where to start the discussion and what you can expect throughout. Without this information, you’re taking an unnecessary gamble for your practice.
Understanding how the game is played is equally vital to a successful negotiation. The same way you can’t win a poker hand if you don’t understand the rules and procedures of the game, you can’t win in commercial real estate unless you are aware of how landlords process information, how they think, what makes them concede for some tenants but not for others, etc. It all starts with developing a strategy that is built upon a foundation of you, the practice owner, considering multiple options. In the game of commercial real estate, whoever has the most viable options, wins. If the landlord doesn’t think you can (or will) move, they win. If they know you are fielding other (potentially more appealing) offers from other landlords or sellers, you win.
How you build that strategy is unique to each practice’s situation. Are you leasing, but wondering if purchasing is a better option? Have you been in your space for 15 years, and your lease renewal is coming up again? Is it time to look for nicer space that aligns closer with the vision you have for your practice? Each one of these scenarios requires a customized strategy to help you gain the upper hand. You can’t go into your next practice office space negotiation without a strategy. That’d be like playing a high-stakes poker game without a plan to win—just betting on chance, which is a losing game plan.
The favorite “hand” of a landlord is when they start negotiating directly with a tenant who is unrepresented. This is their royal flush, as they know an unrepresented tenant means they don’t have access to the same market insight and intel, they likely don’t have a strategy, and the landlord can bluff and play with no pushback. The landlord knows they win nearly every hand played directly against a tenant.
On the other hand, when a tenant comes armed with information, a proven game plan, and a team of expert advisors, the odds become much more balanced. A real estate attorney, a CPA, and a commercial real estate agent focused exclusively on representing healthcare tenants and buyers will ensure you’ve got the right team advising you and walking you through the transaction. Landlords are in the real estate business, transacting dozens to even hundreds of times per year, and yet that is exactly what their team looks like. They know winning in commercial real estate has everything to do with surrounding yourself with the right representation.
While poker is ultimately a game of luck and chance, there are techniques you can employ to increase your odds of walking away the victor. The same is most certainly true in healthcare real estate. Looking at market intel, developing a proven strategy, and assembling your team of advisors will help you confidently go “All-In” on maximizing your profitability through real estate.
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 find an expert agent representing healthcare practices in your area.