Practice Management

Negotiating Commercial Leases & Renewals For Dummies: More Commercial Leasing Tips for Veterinarian Tenants II

By: Jeff Grandfield and Dale Willerton – The Lease Coach

For many veterinarian tenants, negotiating a good lease or lease renewal against an experienced agent or landlord can be a challenge. While a veterinarian focuses on his/her animal patient’s care, savvy real estate agents and brokers are specialized sales people. Their job is to sell tenants on leasing their location at the highest possible rental rate.

As explained in our new book, Negotiating Commercial Leases & Renewals FOR DUMMIES, tenants may go through the leasing process only two or three times in their entire lifetime – yet they have to negotiate against seasoned professionals who negotiate leases every day for a living. Negotiating appropriate leasing terms is vital for a veterinarian tenant as the amount of rent he pays will directly affect the doctor’s financial bottom line.

Whether you are leasing a new location for the first time or negotiating a lease renewal for your clinic, these are some money-saving tips for veterinarian tenants:

Negotiate the Lease Terms Collectively:  In other words, don’t agree to the rental rate until you’ve negotiated the tenant allowance, and don’t agree to the lease term (or length) until you’ve negotiated the Use clause. All lease terms are interconnected and you should be negotiating with the best collective deal in mind.

Leverage the Lease Term Into Incentives: Since most lease deals are negotiated through commercial brokers or commissioned leasing agent, the lease term is a big negotiating chip for the tenant (the agent’s commission is in-part based on the length of the term you sign … the longer the term, the higher the commission paid). Since the agent’s commission is generally five percent of the base rent calculated on the first five years, you can now control his paycheck. To that end, even if you want a five-year lease, start negotiating for three years. After the first or second round of negotiations, you may be able to leverage a lower rental rate, more free rent, and other incentives by “agreeing” to take a five-year term instead of three. Additionally, most agents will get paid a two percent commission in years 6 to 10, and sometimes on lease renewals as well!

Don’t Telegraph Your Plans: A good football quarterback can take the snap from center, fake a hand-off to his running back, and then pass to a receiver – thereby not telegraphing his plans. As a tenant, try not to speak in terms such as “When I move in … I would like the carpet replaced … this area would make for an excellent waiting room …” and so on. These are called buying signals and they always serve to weaken your bargaining position. Don’t let what you say and the words you choose work against you.

For a copy of our free CD, Leasing Dos & Don’ts for Commercial Tenants, please e-mail request to

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