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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.

     

    Even if your building’s ownership and management are pleasant to work with, respond to issues quickly, and maintain the building well, their primary interest is maximizing profits. Landlords know that without market knowledge, tenants have no baseline against which to compare a lease offer. Therefore, a landlord will most likely offer the highest lease terms that he or she believes an uninformed tenant will accept.

    The only way to know if any offer is truly competitive is to compare it to the market. To do this, you need to identify all the available properties that suit your needs, and then tour a significant number of them to determine which ones will be best suited for you and ensure that you don’t miss any opportunities.

    You then need to negotiate with the landlord at each property to receive the best offers for a suitable space for your practice. These offers will include terms for the base lease rate and any increases in the lease rate, as well as concessions such as free rent and an improvement allowance. You’ll also need to know the lease terms and concession that new tenants in your current building are receiving from your landlord. At each step along the way, you’ll be dealing with a professional real estate broker who is hired to achieve the best possible terms for the landlord.

    Read more: How changing patient expectations will impact your practice

    If this sounds daunting to handle yourself, you do have an alternative. You can hire an experienced real estate professional as your agent—to act on your behalf with your interests in mind. He or she can provide you with comparable properties’ lease rates and build out allowances and other concessions, which can then be used as valuable leverage on your behalf in the negotiations with the landlord. Ideally, you should select an agent with experience representing health care practices because he or she will be able to achieve specific terms and concessions that are not generally available to other types of tenants. Your agent will handle all the research and communication with the landlords while maintaining a professional negotiating posture on your behalf. 

    Fortunately for you as a tenant, landlords and sellers have agreed to pay for an agent’s services on your behalf, so it costs you nothing. Commercial real estate is structured similarly to residential real estate. If you were to sell your home, you might list it with a broker and agree to pay a commission. The commission is split between the listing broker and the broker who brings the buyer. If the listing broker is able to find the buyer directly, then he or she would earn a double commission. The same kind of arrangement is made in the commercial real estate market, and you as a tenant or buyer have access to professional representation at the seller’s expense.

    Most health care providers have plenty to do serving their patients and running a successful practice.  Spending hours on end making sure your lease renewal is competitive and handled properly is typically not the best use of your time. Since professional representation does not cost you anything as a tenant, it makes sense to let a licensed real estate professional review your lease, represent your interests in your negotiations and then help you capitalize on the current market conditions so that you can achieve the best possible terms.

    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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