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Why Dentists Are Not Typical Tenants

Why Dentists Are Not Typical Tenants
by Jeremy D. Behar

Dentists are not your typical commercial tenants. As a niche group with explicit professional space requirements, dentists need an effective office lease written with provisions unique to the business, while providing long-term protection and runway for the practice's success.

Dentists must be conscious of this fact when negotiating the details of an office lease (before signing a new lease or a renewal). Below are a few reasons why dental office leases differ from the typical commercial lease.

Practice build-outs are extensive

Unlike your typical retail tenant, there is an extensive amount of work that needs to be completed to convert an empty shell into a functioning dental office prior to opening the doors. Major construction and renovation is required to build out operatory and waiting rooms, as well as the installation of flooring, dental equipment, furniture and technology.

Leasehold improvements such as electrical work, plumbing fixtures, hazardous waste disposal and more will also be required. This can easily cost upwards of $350,000, taking an average of 6-9 months for build-out time. Language in the dental office lease should support the time frame necessary for your office build-out.
It's often possible to negotiate a free rent period into the lease to ensure you're not paying for the space until your doors are open. It's also often possible to negotiate a tenant improvement allowance (TIA) to help subsidize the costs for your build-out.

At negotiation time, pay close attention to "surrender provisions" in your lease, clauses that formally outline how the space must be returned to the landlord when exiting. It is to your advantage to negotiate the wording of this clause to release you from the liability of having to restore the space back to its original shell, which can add up to $150,000 or more in unexpected costs when you're ready to transition.

Read full article on MultiBriefs.