Doing Your Due Diligence with Healthcare Real Estate
A real estate transaction can either catapult or cripple your practice, which is why many healthcare professionals turn to expert agents. But before you hire a commercial real estate firm, these are the questions you’ll want answered.
Is the agent also representing the landlord or property you’re interested in?
If so, that’s a red flag. When an agent has a listing agreement with the landlord, that’s where their loyalty will lie—increasing the landlord’s profit. They won’t be able to adequately represent both of you in a lease or purchase negotiation, which brings us to the next question you should be asking:
Does the agent represent tenants and buyers only?
Across the industry, it’s typical for real estate firms to represent both tenants and landlords and buyers and sellers. When hiring an agent, however, it’s vital you look for occupier-focused firms—the same way as in court, you wouldn’t ask for legal advice from the opposing party’s attorney. Not only does this eliminate inherent conflicts of interest, but it also allows for more aggressive, tenant-specific negotiations—think lengthening build-out and free rent periods, offering higher tenant improvement allowances, and other important concessions that have the power to shift figures by tens of thousands of dollars in your favor.
Will the agent show me multiple properties?
Negotiating on three to four properties simultaneously is essential, and here’s why: First, you’ll want to see an apples-to-apples, side-by-side view of what the market has to offer. Without market knowledge, you’ll have little baseline against which to compare an offer or lease rate. Second, understanding comps and the local market is the foundation of a successful negotiation. Agents find out what viable options are available on the market for you and exactly how they compare to one another and the space you’re eyeing.
Is the agent familiar with the healthcare industry?
Have they demonstrated knowledge of your industry or business? Healthcare spaces have specific requirements that need to be addressed up front before they turn into costly mistakes.
For healthcare providers, working with real estate agents familiar with the healthcare industry can make a drastic difference. Understanding healthcare practice lending programs or what a dentist, optometrist, or physician needs from an office space is valuable to moving deals forward and saving providers money. For instance, we know veterinarians need soundproofing rooms, surgery suites, relief areas, and private exits, while dentists require operatories, laboratories, sterilization areas, consultation rooms, along with the ability for technology utilization.
Not only will healthcare real estate agents be familiar with the unique needs required by doctors across the board, they’re also advocates for healthcare providers as tenants. If they don’t understand your business and industry, how can they sell the landlord on your value? For instance, across the country, listing agents, landlords and developers know that CARR works solely with healthcare clients, which happen to be some of the most desirable tenants in the industry. Medical providers and healthcare clients have some of the lowest default rates, and landlords view them as portfolio stabilizers. So, our agents communicate that and leverage their value to obtain concessions or lease rates that otherwise may have been unavailable.
Does the agent have reputable contacts in the industry?
If you plan to build out a new space you’ll be leasing or purchasing, collaboration between your agent, contractor, architect, and lender is imperative. Is your agent in sync with local professionals who can help? The agent should be well-connected within the real estate and healthcare community in order to introduce you to other key players you’ll need on your team.
At CARR, our agents view their roles as strategic partners, vetting national and local vendors that best support our clients. These ongoing relationships and conversations are valuable to help us move the needle in negotiations and offer the best possible experience with everything from lease negotiations and purchase vs. lease decisions to renewals and market evaluations.
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.