Practice Management: Lease Renewals
Originally posted in MedEsthetics
It’s time to renew your lease. Are you ready to negotiate? If you’re like many practice owners, the answer is no. “Lease renewals are the No. 1 transaction in all of commercial real estate—for every new lease, there are 20 or 30 lease renewals happening—but it is the transaction that often receives the least amount of attention,” says Colin Carr, founder and CEO of CARR Healthcare, a nationwide commercial tenant brokerage based in Denver.
For most practices, rent is the second largest expense, behind payroll. And the common practice of adjusting staff levels to reflect a changing business environment simply won’t work with lease payments. Once you sign on the bottom line, you are stuck with those costs for the life of the lease.
“You get one crack at your lease every seven or 10 years. Make a mistake, and it could cost you a lot of money; conversely, if you capitalize on the opportunity, it could save your practice tens to hundreds of thousands of dollars,” says Carr.
So how can you get the best deal? Follow these steps.