While purchasing commercial property is one option for your practice, who can afford it?
The better option may be to lease commercial space instead. As lease consultants and the co-authors of Negotiating Commercial Leases & Renewals for Dummies, we often encourage chiropractors to look at both options; however, leasing commercial space is often far more realistic.
Whether you are opening your first chiropractic practice or approaching your lease renewal date and looking to relocate, consider the following benefits of leasing commercial space.
More location choices
Whether you’re looking at a business condo, an office in a two-story building, a commercial unit in a strip plaza, or even a refurbished home, you’re far more likely to find a prime spot for your practice to lease rather than to buy. Given the choice, commercial landlords will prefer gaining stable, long-term, rent- paying tenants rather than selling their investment properties.
With more leasing choices available (approximately 90 percent of available locations in North America are for lease and not for sale), a chiropractic tenant can open a practice, accept patients, and start earning business income much sooner.
Coming up with the sizable down payment needed to purchase property could be a challenge. Depending on your financial stability, obtaining a business loan may be difficult. Instead, your monthly rental payments to a commercial landlord are likely to be far more feasible.
If your practice isn’t faring well in one location, it may be quicker and easier to fulfill your lease obligations (or even terminate your lease early) and then relocate your practice, rather than listing property for sale an having to wait for a buyer to step forward.
Reduced maintenance costs
Whether your commercial space needs a fresh coat of paint or your central heating and air conditioning unit has failed, you can call on your landlord to perform the necessary repairs. You also won’t have to tent to property maintenance issues (e.g., garbage removal, lawn mowing, or snow shoveling). Any such matters are contractually and financially the landlord’s responsibility.
A landlord will often offer bonuses to new tenants to encourage them to lease space in a property. You can potentially negotiate for leasehold improvements or free rent. Whatever the landlord provides, these are the kinds of benefits you won’t get when buying commercial property.
Also, when deciding to lease, think outside the box. Be open to considering all opportunities—both conventional and unconventional. We live in an “anything goes” or “whatever works” society, and that philosophy often applies to business locations as well.
A major restaurant chain located near our office went under and the freestanding building was quickly snapped up by a group of orthodontists for their new office. A big-box store can move and be replaced by a sporting goods anchor that gets one-tenth of the traffic. A chiropractor moves in where a fitness facility failed, and so on.
There are both orthodox and unorthodox opportunities for every business industry. Perhaps a trophy location will make sense for your practice. This is a specific unit that outshines all the other spaces for lease or purchase in a property because of its prominence and visibility.
Trophy locations do not sell or lease cheaply; however, for some chiropractors, having a trophy location can make their practice far more conspicuous. Do all chiropractors need to be located in the same type of building? No, but evaluate an array of available properties. The unique qualities of a location can represent the 20-percent advantage you need to be successful over your competitors.
Dale Willerton (far left) and Jeff Grandfield (immediate left) are The Lease Coach, commercial lease consultants. They are speakers and the co-authors of Negotiating Commercial Leases and Renewals for Dummies. For a copy of their free CD, “Leasing Do’s & Don’ts for Chiro tenants,” email your request to email@example.com. You can also visit them through theleasecoach.com.