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    Why a broker may be beneficial for your next dental office lease negotiation

    Working with a real estate broker can help you achieve the best possible terms.

    The current commercial real estate market has been dramatically affected by the economy in the past several years. This has resulted in a very favorable environment for tenants, as landlords are extremely motivated to attract new tenants and retain existing ones—especially high-quality tenants such as health care practices. Some of the current opportunities include reducing your monthly rent payment, upgrading your office’s appearance through an improvement allowance, and obtaining free rent and other favorable concessions.

    One of the keys to a successful negotiation is to take advantage of the free services of a real estate broker or agent. This is important because most landlords are in the business of real estate and typically have the upper hand when negotiating with tenants directly. Additionally, the majority of landlords hire a real estate broker to represent their interests and provide expertise. Though dramatic concessions are available, a specific posture and negotiation strategy are paramount to achieving the best possible terms.

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    When the time comes to evaluate your current lease situation, you’ll need to consider the pros and cons of renewing the lease in your current location versus relocating to a new property. Since economics and concessions will have a dramatic impact on the decision, it is essential to understand all of your available options and implement a strategy to leverage them. It is critical to the success of your negotiation that your landlord knows that you have the option to relocate, which means that you need to begin negotiations well in advance of your lease’s expiration, ideally nine to 24 months before your current term ends.

    When you begin negotiations, you have two options available to you: You can work with the landlord’s agent and represent yourself, or you can hire a real estate broker. Here are some things you need to know if you choose to represent yourself in a lease negotiation.

    Under state law, a real estate broker can enter into an agreement to serve clients as an agent. An agent is obligated to serve his or her client’s interests with the utmost good faith, loyalty and fidelity. Clearly, it is not practical for an agent to act with utmost loyalty to two parties on opposite sides of a transaction, meaning the landlord or landlord’s broker should not also represent your interests.

    Simply put, if you do not bring an agent into the negotiations, no one will be protecting your interests but yourself. If you deal directly with the landlord or landlord’s agent, it is crucial to remember that he or she is not legally or logically in a position to advocate on your behalf, so it is important to exercise discretion with the information you share with the landlord’s agent.

    Continue to page two to read more...

    Carr Healthcare Realty
    Carr Healthcare Realty is the nation’s leading provider of commercial real estate services for healthcare tenants and buyers. Every ...

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