Whether you’re expanding your medical practice or just moved to the Washington, D.C. area, finding the right medical office space to lease is essential. It’s not only about location: Your medical practice has unique needs when compared to traditional businesses, and it requires a commercial property with specific allowances for use, build-out, and more.
From examination rooms to hazardous materials, ADA compliance, and specific equipment like X-ray machines, you need to make sure that you’re clear on the lease terms before you sign as a medical tenant. Finding yourself in a restrictive lease when you’re trying to start or grow your practice can be devastating. Here are a few things you need to think about before leasing medical office space.
Should You Lease or Buy a Medical Office?
If leasing medical office space can be tricky, should you consider buying an office instead? Maybe, or maybe not. Medical office properties are expensive, and it might not be the right move for a new practice. Leasing a space is often the best option for small operations or satellite offices, and it comes with its share of perks:
- Lower upfront costs
- Potentially lower monthly overhead costs
- Less risk
- Easier upkeep
- No surprise building repair costs
- Potential tax benefits
- Flexibility to expand or downsize in the future
Talk to your real estate advisor about the pros and cons of renting and buying, then decide which one makes the most sense for your situation. If leasing turns out to be the best option, it’s important to know what to look for in the space and what you can negotiate in the terms.
What to Look for in a Medical Office Lease
You have to consider the space itself when determining if a location is right for your medical office. Here are a few questions you’ll want to ask to make sure you’re getting what you need:
- Is it big enough?
Ask about the square footage and whether temporary walls can be erected or removed. When determining how much office space you need, you’ll want to consider how many employees you have, the equipment you need, and how you want the space to look.
- Is my equipment permitted?
Tell your landlord about any special equipment you use — such as X-ray machines — and be sure to include it all in the lease agreement for your protection. Don’t forget to ask about biomedical waste as well. These permissions should also be written into the lease for your protection down the road.
- Is the building compliant with the Americans with Disabilities Act?
Legally, it should be, but some aren’t. Always double-check, and remember to negotiate for the landlord to pay for any updates that need to be made.
- What are the build-out restrictions?
You want to make sure you can design the space to best support your practice. It is also best to ask about a tenant improvement allowance to make sure you’re reimbursed for improvements you make to the property, like new paint or flooring.
- Are my office hours acceptable?
Some buildings have restrictions on business hours of operation or don’t allow after-hours access. Make sure your schedule aligns with what’s permitted.
- Is there room to grow?
If you decide to expand, will you be able to lease adjacent space at the same rate?
- What’s the rental rate now — and how much will it be later?
Make sure you know about planned rent increases over the course of your lease.
- What’s the rule on landlord’s access?
Some buildings allow the landlord to enter businesses occasionally, but this may violate privacy laws for a medical office. Be sure to clear this up before signing.
- Are there extra costs?
In medical office buildings and other shared spaces, you may find yourself paying your share for common areas like hallways, lobbies, bathrooms, and waiting rooms. Double-check the usable square feet (your space for your medical office) and the rentable square feet (what you’re paying for overall).
- Is there enough parking?
You’ll want a minimum of five spaces for every 1,000 feet of office space. Depending upon your particular practice, a drop-off zone may be helpful, too.
- Can I have exclusivity?
You don’t want your landlord to lease the next-door space to your competitor.
The answers to some of these questions might be deal breakers for you (like the size and exclusivity consideration), while others are manageable but important to know about upfront (like rent increases and rentable square feet). You may also be able to negotiate a lot of it.
What You Can Negotiate
It’s essential to negotiate your contract to ensure you’re getting what you need. If you’re renting in a medical office property, many of your considerations may already be accounted for. If you’re looking at a traditional commercial property for your medical office space, however, the existing contracts may not contain the language that covers your needs.
Work with your real estate broker to understand the lease terms. You may be able to negotiate rental rate increases, landlord’s access, after-hours access, automatic lease renewal, tenant improvement allowances, exclusivity, access to adjacent space in the future at the same rental rate, and more.
How to Find the Right Space for Your Medical Facility in the Washington, D.C. Area
There’s a lot to think about when leasing medical office space, but you don’t have to do it alone. Working with a trusted commercial real estate advisor can make the process far simpler and more enjoyable for you because:
- Your advisor knows the market and can narrow your search based on your budget and location preferences.
- They can also help you understand the contract and negotiate the medical office lease terms you need.
When you work with The Genau Group, for example, we take time to get to know you and your business, finances, and goals. We search the commercial real estate market and present you with a list of recommended options that match your needs, and we’re with you through the entire process to help you negotiate and manage your lease. You can also rely on us if you need a new space in the future, whether you decide to expand, downsize, or take advantage of better rent or lease terms.
Let The Genau Group Help You Find Your New Medical Office
At The Genau Group, all of our founding members were born and raised in D.C., have backgrounds in accounting and finance, and bring a collective 100 years of real estate experience to the table. Contact our team today to discuss your medical office lease questions or speak with an expert about all your commercial real estate needs.