Schedule
Time is money when it comes to negotiating a lease renewal or a new lease. If you do not start early enough, you may find yourself forced to accept an offer that is not beneficial. If you wait until your landlord contacts you regarding your lease renewal, your negotiation leverage is already compromised. Generally, landlords purposely do not contact you in a reasonable amount of time to allow you to execute your due diligence and understand the options available.
Whether your initial desire is to renew, move or purchase, there are numerous factors to weigh, consider and decide upon. Of all the critical items, timing is the most important. Most healthcare professionals are very busy, and getting a late start on the process is the most common mistake. To make the best decisions for your practice, you need the power of knowledge and timing on your side.
How much in advance you start the process depends largely upon your situation and the size of your practice. If your initial desire is to negotiate a lease renewal in your current space, usually six to nine months is sufficient. If you have a large practice and/or would like to consider purchase options, a longer timeframe would be to your advantage. To illustrate the process, Healthcare Real Estate Services has provided an example timeline of the process and considerations that should be allocated once your healthcare real estate advisor is engaged:
Week 1 - 2
Engage your healthcare real estate advisor
Review current lease economics, location, floor plan, services, areas for improvement, practice growth, and future plans for practice
Week 3 - 4
Research, review, and compare the economics and other benefits of available properties that most closely match your mission objectives to narrow down and choose which properties to arrange tours for
Week 5 - 6
Tenant rep preview and client tours of prospective properties
Week 7 - 8
Request proposals and submit letters of intent to begin negotiation for final analysis of at least the three best choices
Week 9 - 10
Evaluate and compare the economics of the top choices using occupancy cost comparative analysis software and other potential impacts on your practice
Week 11 - 14
Negotiate on top space choice or choices
Continue to monitor market for optional spaces
Week 15 - 18
Negotiate the actual lease document with the assistance of the tenant representative and legal counsel and execute the lease contract
Week 19 - 24
Work with space planners and others to design the build-out, furniture, equipment placement, flow, and finishes
Week 25 - 29
Obtain contractor estimates, negotiate contractor and vendor agreements, and obtain building permits. Timing varies depending on the situation and county.
Week 30 - 46
Construction of build-out, equipment, and furniture placement
Move-in
As you can see from this timeline example, a year in advance is generally a safe timeframe to start your search as long as you stay on track. Timeframes will vary depending on the specifics of your individual situation. The important factor to remember is to keep time on your side. We are ready to assist you with that.
Contact HRES at 248-514-9197 or submit the form below to request a consultation.