Hi Everyone! Welcome back to “This Can All Be Easier” blog. My name is Angie Bachman. The last four weeks of Dental Office Design Month have been incredible. The design team at Design Ergonomics is the best in the business – I thank them for providing exceptional content to my readers! As promised, we have a bonus week in October which means a bonus blog. If you are ready to build your dream practice in a lease space, you should really consider a leasing agent. We trust CARR Healthcare Realty – who really know the dental industry and are a very dedicated group. Matt Kolcum from CARR Healthcare Realty shares some fundamentals you probably didn’t know existed.
Commercial Real Estate Fundamentals
By Matt Kolcum
CARR Healthcare Realty
For most healthcare practices, real estate is the second-highest expense behind payroll. The difference between a properly or poorly negotiated transaction can benefit or cost a practice tens to hundreds of thousands of dollars over a ten year period. Additionally, you typically get only one opportunity every 5 to 10 years to take advantage of a new negotiation. With this much at stake, every transaction is paramount to maximizing profitability.
Being educated on commercial real estate fundamentals can increase the potential to make your practice a success. The following are key considerations to understand.
Visibility and Signage
Two of the most requested property considerations for new offices are strong visibility and exterior signage, either on the building itself or on a prominent monument sign in front of the building. These requests are also two of the most important items for nearly every national retail tenant.
Since the early 2000’s, more and more healthcare providers have been seeking the same benefits that come from the positive exposure of both visibility and signage. It helps patients find your location and provides built-in marketing and brand awareness. That being said, visibility and signage usually come with a higher price tag. In the majority of commercial real estate markets, landlords charge a premium for high visibility properties, spaces, and signage. Landlords understand the value that visibility and signage offer and properties that benefit from them typically are priced higher than similar properties that don’t have the same exposure.
There are many times that the exposure and signage are worth the added expense. An alternative and potentially stronger position could be to select a property that would save you more money on a monthly basis and utilize the savings to invest in a targeted marketing strategy. Last, there are some very specific types of practices that are 100% driven by referrals of other practitioners, where very little benefit is obtained or needed from either visibility or signage. If the vast majority of your new patients are coming at the recommendation of a referring doctor, paying the premium for signage and visibility may not be worth it.
As with most financial decisions, a detailed evaluation provided by your agent should help you weigh the difference between cost and benefit.
Another main consideration alongside visibility and signage is access to your office. In other words, if a patient is driving to your office, what is the closest major intersection to your property? Where do you turn to get into your property’s parking lot? Does the property have great visibility but challenging or poor access? That problem can occur when the primary access point to a property is a location you need to turn into before you can actually see the building. When that happens, a new patient drives by the building and sees your office, but then has to pull a U-turn or make multiple turns to get back to the main access point of your location. Thankfully, the majority of new patients will rely upon GPS and mapping software on their phones to find your office the first time. However, the easier the access is for the patient to get to your building and the more recognizable the major intersections or known landmarks are to your property, the more ideal the patient’s experience is in finding your office. Thus, the more likely patients or referral practices will recommend you.
Another vital property consideration for your office space is parking, for both your staff and your patients. When evaluating the parking needs for your patients, you have three groups to consider: patients that are coming to your office, patients that are already inside your office, and patients that are leaving your office.
Depending on your schedule, there can be a high demand for the parking allotted to your space due to other tenants sharing your parking lot. While most Medical Office Buildings and Retail Centers have a higher parking ratio, for this reason, its important to make sure the property you are considering has ample parking both for your needs and the needs of other tenants that ebb and flow throughout the day. While some landlords allow specific tenants to have a few reserved parking spaces, the majority of landlords do not grant exclusive parking spaces for patients. This means it’s important to ensure the locations you are considering can accommodate your current practice and future growth.
CARR is the nation’s leading provider of commercial real estate services for healthcare tenants and buyers. Every year, thousands of healthcare practices trust CARR to achieve the most favorable terms on their lease and purchase negotiations. 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 find an expert agent representing healthcare practices in your area.
Thank you, Matt, for these tips. One thing you need to know is CARR Healthcare Realty works for you. They know you aren’t supposed to be able to read a contract, write it, or understand it. Unlike your dental suppliers who demand a fee for lease negotiations and such, CARR works for you, on your behalf. This is what they do. You wouldn’t ask your landlord to pull a tooth, right? You do dentistry. When it comes to protecting you and your real estate, let the experts at CARR Healthcare Realty handle it.
They have your best interest and so do I.
- Lead Clinical Consultant