Medical Office Space – What’s Important?
It is daunting to look for a new medical office space, not to mention the anxiety of commitment. So what’s important in a medical office space? What are the deal breakers? Here are a few thoughts.
Avoid the devil. It may sometimes be difficult to deal with a big landlord or real estate company, but with that difficulty comes professionalism. If you get the sense that the landlord does not have his act together, or is unethical, then don’t sign a lease in that building. Look for danger signs such as a last minute change to a term sheet, or reneging on an offer.
Be sure the price is right. Benjamin Franklin wrote ““If you can’t pay for a thing, don’t buy it. If you can’t get paid for it, don’t sell it. Do this, and you will have calm and drowsy nights, with all of the good business you have now and none of the bad.” The take home point is, if you don’t think you can afford the rent, don’t get into it.
Don’t put a square peg in a round hole. Pick an office and a price-point that is right for you. If you plan to open a general practice serving primarily working class people, don’t look to take over the office of the local plastic surgeon. Conversely, if you are selling face lifts you need to walk the walk and talk the talk.
Highways shrink distance. Although it is nice to be in the center of town, if your town is only 7,211 people that’s still not so good. Research your catchment area and put yourself within a few minutes of your area’s major highways.
Parking, parking, and more parking. Medical offices are parking hogs. Between the doctors, the staff and the constant patient flows, a parking lot can be overflowing in no time. Run, don’t walk, away from an office building with insufficient parking. If the broker tells you about the nearby municipal lot or on-street parking, keep running. (Note: this caveat does not apply in dense urban areas where people take public transportation and don’t own cars, such as New York City.) Most zoning laws require a parking ratio of at least 4 spots per 1,000 square feet of office space, and sometimes more.
The shell game. It is convenient sometimes to take over a built out space, just move in and start practicing. Sometimes this works out, depending who had the space before you. However, if you start with a shell, or demolish to a shell, you have total control over your final layout. This will be more efficient. Often the landlord will contribute to this build-out in the form of a Tenant Improvement allowance, or Landlord’s Work. This is usually a tug-of-war between length of lease term, amount of work, and base rent.
What goes around comes around. Although it might be nice to have a stand-along medical building housing just your practice, there are advantages to being in a medical building. You can build your practice by referral from other physician’s in the building, or just by foot traffic and potential patients viewing the building directory.
Shop carefully, take your time, negotiate for spaces that you can walk away from, and consider sharing a medical office space for efficiency.