The nuances surrounding commercial office leases for your therapy practice can be stressful, whether you’re a new practitioner or looking to move your practice. You’re also likely balancing a full calendar, so we’ve put together a quick list of tips to consider when looking to sign a therapy office lease.
1. Commercial leases are not like residential
You’re probably familiar with a residential lease, but a commercial lease is nothing like a residential lease. For example, a commercial lease is a heavily negotiated contract while residential leases are mostly limited to changes in duration and monthly rent. Commercial leases also structured very differently, which can have a big impact on what your monthly payments look like over the lease term. They’re often defined as “net,” which means the tenant pays a base rate plus extras (such as property taxes, insurance and/or maintenance). Square footage is not calculated based on usable space and can include common spaces like hallways and lobbies. You’ll want to spend time dissecting the lease structure and the terms with a professional who can help you understand any potential impacts on your practice.
2. Define your must-haves
Knowing what you want is obvious but critical in picking the right fit for your lease. They’ll save you time by limiting your search to spaces suitable for your practice and your standards, after all, searching for property is one big filtering exercise.
Be specific about what you’re looking for in a property. For example, you may have requirements for sound. That means setting standards for the building interior (such as walls you share with neighbors) and knowing what would be a non-starter for exterior noise (like windows, street traffic, etc).
3. Know your real estate terms
When you’re considering a location, there are bound to be a range of real estate terms that you might not have ever encountered before. Like what’s the difference between rentable square feet and usable square feet? Getting definitions for all of these terms can help you decide if an offer is a bad deal or a great deal, and can help you modify your filter for future spaces. They’ll also help you think through the liabilities on your business, which can be adjusted if you rent by hour, rent as a percent, or pay by the day. Familiarity with real estate terms can also help you navigate more complicated provisions like demo and relocation clauses and many more that we highlighted in this post on medical office leasing. These things significantly impact the sustainability of your practice and need to be carefully evaluated.
4. Know your budget
You probably have a set budget for your office space, but don’t forget to factor in the upfront expenses to build out and personalize the space. Even the cosmetic expenses like furniture, decorations, and waiting room necessities should be part of your larger budget.
It’s important to be especially strict with your budget for your first commercial therapy office space, as there are still so many unknowns with your practice and it’s relationship to a new space. Keeping a buffer in your budget to address the unknowns will keep some pressure off the day-to-day of your practice.
5. Put yourself in your patients’ shoes
When it comes down to it, your selection of a new space affects your patients as much as it affects you. Thinking through their experience will also help you decide on the right place to lease.
Is it going to be easy for your patients to find you? Is there nearby parking or access to public transportation? Is there any friction to entering the building, like a security desk or crowded elevator lines? Is your building and new space ADA-compliant? Will the neighborhood you choose prevent you from attracting new patients?
6. Be prepared to negotiate
In the world of commercial leasing, everything is negotiable. And remember that you can ask for a range of things beyond money. You might be able to get a few rent-free months included or have the landlord contribute to any build-out expenses of your space. Think about other potential negotiation points like utilities, cleaning, landscaping, maintenance, and on-site security.
Despite the knowledge you’ve gained over your search, it’s important to work with a commercial real estate attorney who can help you understand any potential impacts on your practice. If you’re choosing to rent your own therapy space, an attorney can help save you thousands of dollars by negotiating a clear bottom line every month.
It used to be that juggling all these factors and terminology was a time-consuming necessity in being a private therapist. Truly, it is overwhelming, and you aren’t the only one who feels that way. But, that’s actually why trends like medical coworking have become so popular. More and more, practitioners have been letting companies like Lina handle the nuances of physical space to reduce costs and complexity so that you can focus on your patients and your work.