Assume that you have your practice-loan funding almost in hand and you are ready to start looking for an office to lease. What do you look for? How do you know when you’ve found the perfect office?

You will probably start out working with a commercial real estate agent, who will show you property to lease. Your first decision will probably be the type of building. Consider the trade-off between visibility, which means higher rent, and advertising. If you have more visibility and higher rent, you should not have to pay as much for advertising.

CONSIDERATIONS

When you find a likely location and you start talking with the property owner or property manager, here are some considerations and questions:

• Space needed. How much space will you need? Most chiropractic offices use between 1,000 and 1,500 square feet, but this depends on your practice type and the activities you will be performing (including massage therapy, rehabilitation, etc.).

• Terms. How long is the lease term? The property owner usually wants you to commit to a longer-term lease. If you are willing to do this, you should receive concessions in the form of free months of rent or help paying for build-out.

• X-ray. Will you be using x-ray equipment? Is 200-volt electric available for the unit? Can you add lead lining to the walls? Will you be able to shoot toward an outside wall?

• Signs. What are the restrictions on size and placement of signs? What does the property manager require? What are the local signage restrictions?

• Parking. Is the parking adequate? Are the parking places for staff? Is adequate handicapped parking available?

• Visibility. Is the office visible form the road? Are walkways and building adequately lit at night?

• Restrictions. Are there any restrictions on your access to the building on evenings and weekends?

• Security. Is a security service/security alarm provided? Can you install your own system?

• Breaking the Lease. What are the penalties if you break the lease before the end of the term? Can you renegotiate at any time during the lease?

• Subletting. Can you sublet to another chiropractor? To a massage therapist? Are there restrictions on the number of doctors who can practice with you?

• Security deposit. What is the security deposit?

• Expansion. Is there a possibility of expanding, either by purchasing an additional unit or building out?

• Neighbors. Are neighboring tenants compatible with your practice? Do you want to prevent other chiropractors from leasing in this building?

• Compliance. Are the office and parking areas ADA-compliant? Are offices HIPPA compliant?

The most important consideration is the type of lease. The type depends on who pays what. In a gross lease, the property owner pays utilities, repairs, insurance, and (sometimes) property taxes. In a triple net lease, the tenant (you) pays the taxes, insurance, and maintenance.

DON’T FORGET MAINTENANCE

Don’t forget the cost of CAM (common area maintenance), the amount you pay for common areas of the building. CAM costs in real estate taxes, utilities, and maintenance can increase your total lease costs substantially, up to $5 a square foot. In this example, if you have 1000 square feet, you would be paying $416 a month for CAM costs.

Here are other costs that need to be considered. Be sure to ask who will pay these:

• Real estate taxes
• Snow removal
• Driveway, sidewalk, parking lot repairs and maintenance
• Assessments
• Electricity, gas, heat
• Refuse collection
• Water charges
• Janitorial services
• Lawn care
• Sewer charges
• Property, casualty, liability insurance
• Structural and roof repairs and replacements
• Lawn care, landscape maintenance
• Non-structural repairs and maintenance/replacements
• Mechanical systems repairs, maintenance, replacements

Before you sign, make sure you understand your costs. This is the cost per square foot multiplied by the square footage to get an annual lease cost.

Let’s say it’s $18 a square foot and 1,000 square feet. Your annual cost in this case is $18,000. Just divide by 12 to get the monthly cost: $1,500 a month.

Finally, before you sign any lease, ask an attorney review it to be sure that all terms and conditions are included and are stated clearly in writing. You must have your license to practice in hand before you commit yourself to making lease payments, or you can sign a lease with a contingency.

Back