Healthcare Providers: Beware of Commercial Landlords
When working with commercial real estate landlords for your healthcare practice, it can be a challenge to maintain clear communication and common understanding. Unfortunately, miscommunication of key issues can take a toll on your practice profitability. This article is designed to help you be ready for successful negotiations, so that you are positioned to avoid some of the most common misconceptions between landlords and practice owners.
Don’t Put Too Much Trust in the Landlord
A common strategy for commercial real estate landlords is to create a friendship with tenants. While it is helpful to maintain goodwill, sometimes tenants overlook the fact that financial gain is the landlord’s main goal. The landlord wants to receive as much as possible to pay the mortgage and have a little left over for profits. Remember: it’s business, not personal.
If tenants put too much trust in the landlord, then the financial burdens can add up due to poor negotiation on the lease. It is wise to bring in legal representation to assist so that you receive the best possible terms.
One benefit of representation is that you can avoid uncomfortable conversations with your landlord. You can focus on the tasks required for your daily activities in your practice, instead of trying to navigate the negotiations. There’s a higher chance that you can protect your relationship with the landlord when you have representation.
Is the Landlord a Patient?
Other complications can arise when the landlord is a patient of the healthcare practice. In this situation, the tenant might be hesitant to push back on the landlord when needed because it is hard to tell when you are wearing the hat as a doctor or a tenant. Keep in mind that sometimes it isn’t worth a few hundred dollars in business when you consider the other costs that might be incurred due to poor negotiations, such as expenses and overhead.
Ask yourself an important question: Would you rather lose a few hundred dollars a year because the landlord is no longer a patient, or thousands (or even tens of thousands) a year due to negotiation concessions that are made resulting in higher expenses and rent payments? In most situations, it isn’t worth having one more patient at the sacrifice of the commercial real estate negotiation.
Watching Out for the Interests of Your Practice
You haven’t been professionally trained to handle negotiations, so don’t overlook the importance of having representation to help. These services are essential to ensure that you receive the best terms that are available and nothing is overlooked in the negotiations.
Remember that the commercial real estate landlord is not on your side, which is why you shouldn’t skip the professional services needed to protect your practice. If you have questions about buying or selling a healthcare business, then JRA is here to assist. We specialize in these commercial real estate services. Our team has been through this process with many other healthcare providers, so we understand the best solutions for optimal negotiations.