By: Douglas Hughes, (Guest Blogger from CARR)
How do you handle a real estate negotiation if your landlord is also your patient?
Many healthcare tenants find themselves in this situation when approaching a lease renewal or relocation. Compounding the situation, is that most healthcare professionals are not prone to conflict or confrontation and would prefer to avoid them. This creates a scenario where tenants want to obtain the best terms possible for their practice without upsetting their landlord and losing them as a patient.
In an ideal world, you could tell people exactly what you hope to achieve and then expect to receive a fair response. Unfortunately, commercial real estate is not one of those worlds! The difference between a properly or poorly negotiated lease or purchase contract can benefit or cost you tens to hundreds of thousands of dollars over a ten-year period. Understanding how much is really at stake during a commercial real estate negotiation changes how you should approach every transaction.
To help your perspective, look at these foundational questions:
- Do you realize your landlord’s objective is to maximize their investment and achieve the highest returns?
- Do you realize that just like your landlord comes to you for healthcare services because they are not trained in your specialty, that you should follow the same approach and go to others that are trained in specialties that you are not trained in, such as commercial real estate?
- Would you rather risk losing a patient or overpaying by tens to hundreds of thousands over a ten-year period?
- If your landlord is only your patient so they can get away with overcharging you, do you really want them as a patient?
- If a listing agent is your point of contact, do you realize it is against most state’s real estate laws for that person to give you any advice that would provide you any advantage in the negotiation?
- Do you understand the listing agent is hired to protect and advocate for the landlord, not you?
- If your landlord has been overcharging you for years, do you think they will voluntarily cut their profit by tens of thousands of dollars without a fight?
Nearly every major corporation in the world utilizes trained specialists that negotiate professionally for a living to handle their commercial real estate needs. That being the case, why would you assume you could achieve better results yourself against professional negotiators?
- Do you have the resources and ability to dedicate dozens of hours to fully comb the market, understand all your top options, obtain and organize data and then execute a strategy to maximize your profitability?
- Do you understand that hiring representation will remove you from conversations with your landlord and increase your ability to maintain a healthier relationship when the negotiation is complete?
Most landlords will respect a person who realizes they are not professionally trained in commercial real estate, especially when a large amount money is at stake. Any landlord who tries to convince a tenant not to hire representation isn’t looking out for that tenant, they are looking out for themselves. Telling a doctor or office administrator that they should operate outside their expertise should be seen as ingenuine, deceptive and untrustworthy.
If a landlord would not perform their own healthcare, why would a healthcare professional try to negotiate their own commercial real estate terms? Representing yourself against a landlord and / or listing agent who is trained to negotiate professionally and who’s objective is to make as much money as they can is reckless, especially when there is so much money and liability at stake?
Most landlord’s definition of a market lease rate is the highest they can get a tenant to pay. That should open the eyes of healthcare professionals to realize they need help if they are going to achieve the most favorable terms possible.
Whether you intend to renew your lease, purchase your property or relocate… do yourself, your staff, your patients and everyone tied to your practice a big favor. Take the same approach to maximizing your profitability through real estate that the most successful companies in the world do. Hire professional representation and then execute on a real strategy… whether your current landlord or future landlord is a patient or not.
CARR Healthcare 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 learn more and find an expert agent representing healthcare practices in your area.