There are many factors that impact lease rates and terms for commercial spaces:
- Current and upcoming vacancy in a specific building or market
- Qualilty of the building and space
- Length of lease term
- Amount of tenant improvement allowance, free rent and additional concessions needed
- Financial strength of the tenant
- The landlord’s short-term and long-term plans for the building
- And many additional items…
Several of these considerations are specific to spaces for healthcare tenants, highlighting the need to be represented by a real estate professional with expertise in healthcare.
Landlords and listing brokers will often tell healthcare practices they are getting the best possible lease rate and terms for their space. However, this is rarely the case for healthcare professionals who are unrepresented or are solely looking at lease renewal terms and haven’t thoroughly evaluated the open market.
The first scenario is fairly simple and has been adequately covered in previous blogs. Summary: healthcare providers who attempt to represent themselves will most likely lose a significant amount of time and money while being exposed to costly mistakes.
The second scenario, dealing with negotiations during a lease renewal, is less understood. The summary here is that most healthcare providers make the simple mistake of assuming that if they are in a building they like, then they must be receiving a ‘fair deal’. The reality is, most healthcare professionals are paying much higher than they should be and are leaving large amounts of concessions on the table during lease renewals.
Compounding this further is when landlords or listing brokers attempt to convince a tenant they are not allowed to negotiate their lease terms, tenant improvement allowance or for free rent.
Healthcare professionals that try to obtain a better lease rate and terms without fully understanding the immediate market and the top options available, are often left to ‘bartering’ with their landlord or even ‘begging’ to get a better deal.
The good news is that there is a much better process and game plan if you are properly represented. It is the equivalent of letting a doctor diagnose and create an appropriate treatment plan vs. a patient ‘guessing’ or ‘winging-it’ themselves.
Proper representation will help ensure you truly are receiving the most competitive lease rate and terms for your specific transaction by properly understanding the current market and overall opportunity.
Click the following link to find an expert agent representing healthcare providers new you – Find An Agent.
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. carr.us