By Ken Jorgenson, CARR
Let’s start with some basics regarding your dental real estate:
- Unless you own a mobile clinic, you will need an office space to see patients.
- A practice’s office lease or mortgage is typically its second-highest expense.
- In today’s economy, maximizing profitability is not only a desire, but it’s essential for most practices to stay in business.
If you own a practice, you most likely have an office. That office carries with it many expenses, including monthly rent or mortgage. With an office space also comes staff and payroll as well. These two items are not only needed to have a practice, but are also the two highest expenses for most practices. That being the case, only one of them is negotiable.
Real estate is 100% negotiable. You can decide if you want to be in an office building, retail center, or medical office building, and you can choose to lease or own. You can determine the size, location, and amenities your space will offer. You can choose to be in a stand-alone or multi-tenant building. You can determine the length of lease, concessions you ask for, economic terms, business terms, etc.
So how can you maximize the opportunity?
To start, you need to understand how the game is played. You are a healthcare professional who might engage in two to six commercial transactions in your career. Most landlords and sellers, however, negotiate professionally for a living. You specialize in your field, and they specialize in their field.
The process and outcome are based upon comprehensive real estate market knowledge, authoritative posturing, and negotiation expertise. Winning requires having more options, understanding the correct timing, posture, and negotiation tactics that landlords use, and being able to withstand the stress and conflict that many landlords and sellers use to exploit unsophisticated tenants and buyers.
Let’s focus on a few of these concepts. If you start the transaction at the wrong time, you lose leverage and posture. If you don’t know the market, you are simply begging or bluffing. If you can’t handle conflict, you will most likely receive even more pressure and stress from the landlord or seller to make you uncomfortable and force you into making a decision that you will regret.
And even if you could overcome all of these, without professional representation, you are going to be viewed as a novice and are not going to receive the respect that is necessary to achieve the most favorable terms available to you.
We will continue discussing maximizing your profitability through real estate in the next installment of this series. Stay tuned!
CARR is the nation’s leading provider of commercial real estate services for healthcare tenants and buyers. 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. Visit CARR.US to learn more and find an expert agent representing healthcare practices in your area.
Note: “Neon Real Estate Sign” by griffithchris is licensed with CC BY 2.0. To view a copy of this license, visit https://creativecommons.org/licenses/by/2.0/