Opinions are everywhere. Millions of voices exist both in real life and on the internet on every topic imaginable. The age of information and social connectivity has made distinguishing fact from fiction or helpful advice from crowded noise extremely hard. And this isn’t just an issue of digital literacy. Opinions from family, friends, and colleagues come at you too, often well-meaning, whether or not you solicit any advice.
But there’s a difference between opinion and authority, especially in real estate and in the medical world. For example, you read Dr. John Doe opining on a dedicated Facebook group about why leasing makes no sense for a new practice owner. But while this may have been true for his practice, how many start-ups has he helped? What kind of purchase vs. lease analysis did he run to come up with his conclusion? How does he account for the differences in economic conditions from one market to another across the country? Or maybe you read a message board thread on the importance of choosing a high-cost retail location over a professional office park. Did that author take into account your specialty? What about your specific market or the available inventory in it?
Listen politely to opinions, but take them in conjunction with the advice and counsel you get from a trusted team of advisors who have helped a significant number of healthcare practice owners in the past. Dr. John’s advice might be well-hearted, but his experience opening one office doesn’t give him the insight necessary to advise you. So read the advice, educate yourself on other healthcare professionals’ experiences and then turn to your CPA, your attorney, your healthcare real estate agent, and develop a strategy and execution plan specific to your needs, one that will help you maximize profitability through real estate.
The Power of an Experienced Team
One of the most significant business decisions a healthcare provider can make is strategically choosing an office’s location, whether you’re starting your first practice or relocating an established business; and this remains true regardless if you are leasing or purchasing your office space. And paramount to that success and profitability is assembling the right people around you for support—people whose authority is valued over opinions.
Having the right team protects your valuable time and your bottom line, and the best teams marry trust and expertise in a variety of roles, specialties, and industries. And just as important as finding collaborative partners you trust, is finding people with the right amount of authority in an area that’s beneficial to you. Choosing an attorney who specializes in commercial real estate, for example, will ensure that all legal terms in the lease or purchase contract are drafted to protect your interests in the short and long term. When it comes to lending, many offices require financing for additional build-outs, equipment, furniture, and more, so a lending specialist with a proven track-record lending to healthcare providers is also essential.
Extensive experience is also required of commercial real estate agents, who will provide guidance when choosing locations, evaluating market conditions, vacancies, and costs, offering purchase vs. lease comparisons, managing timelines, and negotiating the most competitive rates and terms. Experienced healthcare real estate agents should create a full market evaluation, providing a snapshot of a competitive market, and even negotiating three to four properties at once in order to offer a side-by-side view of what’s achievable when you have a detailed negotiation strategy.
That type of experience is a powerful tool and part of the due-diligence healthcare providers should receive from an authoritative agent. It’s worth far more than an online opinion about whether leasing or owning is the right move—it’s the research and information that becomes paramount at the negotiation table. As you build your team, look for experienced professionals with a corporate focus to fill each role.
The Power of Specialization
Beyond finding corporate partners with expertise in their field, finding people who specialize in healthcare is vitally important. A commercial architect who focuses on healthcare practices, hospitals, or medical campuses, for example, can ensure that your space is developed based on the needs of patients, healthcare workers, and the communities they serve.
Commercial real estate agents who specialize in the world of healthcare can provide that same specialization. These agents are familiar with the medical industry and understand a doctor’s world, from a real estate perspective. They grasp the nuances in every medical provider’s office that make finding the best space for a dentist or dermatologist drastically different than industrial, traditional office, or retail tenants. Healthcare-specific real estate agents understand the healthcare world. They understand medical lending programs that maximize a practice’s profitability and cashflow. They understand what key concessions can save your practice tens to hundreds of thousands of dollars. And they understand the unique needs required by practices across the board. Agents not only save healthcare professionals significant time and money, they also help avoid costly complications, delays, and obstacles that arise in large real estate transactions.
Specialization also means that there should be no conflicts of interest—your healthcare real estate agent should be exclusively occupier-focused, meaning they’ll never represent landlords or sellers. When an agent represents both sides of the transaction (tenants and landlords or buyers and sellers), which is typical for the majority of real estate firms, there’s a major conflict.
By representing only healthcare tenants and buyers, agents can not only find tenant-specific solutions (like extending build-out periods or improvement allowances), they can also negotiate much more aggressively. This specialized experience can mean tens to hundreds of thousands of dollars saved beyond your lease rate at the end of the day.
The Power of Authority at No Cost
Fortunately for tenants and buyers, healthcare real estate agents come at no cost—and that’s not opinion, that’s fact. Like residential real estate, commercial landlords and sellers agree to pay for an agent’s services on your behalf, whether you’re negotiating a lease renewal, signing a lease at a new location, or purchasing your first medical office space.
At no cost, a healthcare real estate agent’s services can save dozens of hours of valuable time, and just as important–-they have the potential to save your bottom line. Deciphering between opinion and authoritative advice can be the difference of a costly mistake and savings to the tune of hundreds of thousands of dollars. And with so much at stake, the only person who should be offering advice on your commercial real estate transactions is an expert who advocates for healthcare providers and who fully understands the uniqueness of your specific requirements and market.