Help with Building Leases!

Patterson has partnered with Carr Healthcare Realty and we’ve had a few deals done through the local NJ rep at the beginning of leases for new builds, but what about when it’s time to renew? It turns out  that a lot of doctors unknowingly leave money on the table! In addition to the several value added services and products Patterson brings to the table, I wanted to make you aware of this as well. If you’re currently in a lease, or considering building a new practice (or know someone who is) in a lease space, check this out. My manager and I just got this email last night and wanted to share with you-

 

The below is a typical renewal situation.  It’s the same story for many vets that lease space.

Dr. XXXX is a dentist and has been in his space at XXXXX in XXXX since 2004.  He was unrepped in the initial lease and signed his extension 5 years ago, again without any representation.  He is paying $25.32 per square foot.  The landlord is putting brand new tenants in the same building at $16psf.  We have a couple other deals lined up in the area, but may stay since now the LL getting reasonable.  They always try and go around the tenant broker, so I told XXXX in advance to be prepared for that and send the email to me.

Anyhow, I anticipate most of your vets are overmarket on their leases.  Most initial leases are on 10 year terms, though renewals are often 5 years.  The rent negotiation at renewal time is almost always overlooked and can be a big savings for the dentist.

Dr. XXXX is in a 1900sf office.

1900 * 25.32psf * 3% escalators * 10 years = $551,504.31 (the situation he was in if he exercised the option)

1900 * 16psf * 3% escalators * 10 years = $348,501.93 (the deal he will get on the renewal)

The escalator is the increase in rent year on year which is intended to combat the effects of inflation. 

So XXXX will save $203,000 over the next 10 years.  This is happening all the time everywhere and the dentists have no idea.  Most renewals are not this dramatic, but we usually are successful in saving them something…even a few bucks off the rent is real money for the doc over the course of the lease.

I did several of these deals with a Patterson Dental rep.  Each of the referrals from that rep worked out and the dentists will save significant money on rent…the smallest savings was 60k…the largest was 150k.  I did a renewal last year that saved the doc 221,000 over 10 years.

 

If you are in Dr. XXXX’s position, or soon will be, reach out to me!

Summary

If you’re interested it talking to someone at Carr Reality, they are a Nationally represented company. The best part is, You don’t pay for these service, this is just like buying a house in residential reality, the seller (ie. the lease holders) pay a set closing commission costs so bringing in a broker to help represent you can be a great financial boost!

https://carrhr.com/industries/veterinary-real-estate/