Along those same lines, Mr. Eigen advises getting an initial cost to plan and renovate a space, if necessary. Assemble a team of advisors who can help guide you through the process. “A commercial real estate broker with experience in medical practices can be a valuable asset and one that you traditionally do not have to pay, since the broker’s fee is customarily paid by the landlord [although there are some exceptions],” he says. “A knowledgeable architect, an experienced contractor and a good real estate attorney with commercial leasing experience round out the team.”
The best scenario is when the landlord will construct the space in what is known as a build-to-suit, turnkey transaction. “The landlord custom builds the space at his expense in exchange for a long-term lease at a rental rate that enables the landlord to amortize a large percentage of the improvements,” Mr. Eigen explains. “This is not always available, and most of the time the landlord will provide a ‘tenant improvement allowance,’ usually expressed in dollars per square foot of rentable space.” Rentable space is the space within the four walls you will occupy, in addition to your proportionate share of the common areas of the building.
Other Factors to Consider
Other factors you will want to weigh when choosing a location include which hospitals serve the area and what departments in those hospitals are best known for excellence, Mr. Eigen says.
You’ll also want to evaluate a population’s workforce skills and what resources are available to find potential employees, such as trade schools, employment agencies and local economic development agencies.
A practice’s building should look appealing, too. “A practice’s aesthetics are becoming more meaningful,” Mr. Eigen says. Aesthetics go a long way to convey the practice’s attitude and help to attract desirable employees.
Ultimately, “an attractive, well-managed building in an accessible location with minimal competition is your recipe for success,” Mr. Eigen concludes.
Karen Appold is a medical writer in Pennsylvania.
