Master Your Lease Negotiation
Renewing an existing lease may appear straightforward, but many healthcare tenants are subject to exploitation. Lease renewal negotiations are a critical opportunity for healthcare tenants to dramatically impact their bottom line. We specialize in lease renewal negotiations, as they are the transaction we are involved with most frequently. Let us safeguard the future growth of your practice by protecting your interests during the lease renewal process.
What We Can Do
ALLY can represent your practice and help secure the best terms possible on your lease agreement. Here are some of the critical components to achieve the best economic terms possible:
- Start the Lease Negotiation Process Early
We understand that your schedule as a healthcare professional can be hectic and unpredictable. We recommend starting the negotiation process as early as a year before your lease expiration or your tentative move-in date to provide ample time for informed decision-making. Having time creates an advantage for your practice and if utilized correctly will help generate the most advantageous terms.
- Gather All Necessary Information
We will thoroughly review your current or proposed lease agreement and note important terms such as base rent rate versus market, annual rent escalations, renewal options, length of term, and operating expenses. Building operating expenses can vary widely, so it is imperative to consider property taxes, maintenance, utilities, insurance, and other building services in the decision-making process.
We will also research current market rates for comparable spaces in your location and state. Lease rates are advertised by the landlord, but the final terms are determined through negotiation, using benchmarks and backup options as leverage.
- Annual Lease Escalations
Most leases include annual lease rate escalations. While these can vary due to inflation, the typical annual lease rate escalation is around 3%. Our healthcare real estate brokers will negotiate to accept the norm but strive to achieve the lowest rent increase possible. Any reduction in the annual lease rate escalations can save thousands of dollars over the term of the lease.
- Consider a Shorter Lease Term
When a practice is starting for the first time, lease terms can be ten years or more to maximize concessions from the landlord. However, when it comes time to renew the lease, a shorter term may be more beneficial. A 3 to 5-year extension provides flexibility to expand or look for ownership opportunities. There can be pros and cons to any length of term, it’s important you understand all your options.
- Secure Tenant Improvement Allowance
Healthcare practices have complex infrastructure needs, which equate to expensive build-out costs. No matter how high the construction costs are, seeking the maximum tenant improvement allowance from the landlord can significantly impact the bottom line. By leveraging the value that your tenancy brings to the building, we will strive to get the highest dollar amount possible from the landlord.
- Address Current Lease Dissatisfactions
If you are up for a lease renewal but have concerns about any aspect of the agreement, ALLY will consider them and include them in the lease renegotiations.
- Lead the Negotiations
After deciding which renewal conditions to pursue, we will draft a lease proposal that includes recommended lease rates, term, free rent, tenant improvement allowance, operating costs, and other significant business terms. We will take the lead in the negotiation, ensuring you get the best deal possible on your lease agreement.
Confidence in Lease Agreements
At ALLY Healthcare Real Estate, tenant representation is our core focus. Whether you are evaluating a brand-new lease or considering a lease renewal, our comprehensive understanding of lease intricacies and their impact on your bottom line empowers us to negotiate the best terms on your behalf.
Why Choose ALLY Healthcare Real Estate?
- Expertise in Lease Negotiations: Our deep knowledge of lease agreements ensures that every detail is scrutinized to benefit your practice.
- Tailored Solutions: We customize our approach to meet the unique needs of your healthcare practice, ensuring optimal lease terms.
- Savings: By leveraging our industry expertise, we aim to secure the most favorable financial terms, saving you money over the lease term.
Contact ALLY Medical Partners today for more information on how we can assist with your medical practice relocation.