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, here are some money-saving tips for veterinarian tenants:
Process versus Event: Too many veterinarians incorrectly view the leasing process as an event – or one big, long meeting with the landlord. The more you approach commercial leasing as a process, done step-by-step over time, the better chance that you will have of negotiating a better deal – more favorable to you.
Turnkey Construction Advice: If the landlord does your leasehold improvements, they are supposed to turnkey the commercial space. It’s up to the veterinarian tenant to create a comprehensive wish list of the necessary improvements that they want done. In the Offer to Lease, stipulate that the landlord does the space design, secures permits, and finishes the job by a particular deadline. Extras or add-ons will be the tenant’s responsibility, so make sure your Offer to Lease is conditional upon your satisfaction with the final budgeted cost.
Tenant Allowance Advice: Receiving a Tenant Allowance will assist you with some of the costs of initially constructing your clinic. Sometimes you can negotiate to receive some of the money up-front (i.e. one-third upon signing the Offer to Lease), so you won’t have to finance 100% of it. Stipulate exactly when the allowance is to be paid to avoid any confusion. Occasionally, a landlord can’t or won’t pay the money they agreed to pay. You can try to include a clause that says if the landlord doesn’t pay the allowance, the tenant will receive 150% of the value of the allowance in free rent. Either way, this provides your landlord with incentive to pay, or you with reasonable compensation.
Lease Renewal Allowances: Commercial tenants often don’t think that they can negotiate for a tenant allowance on their renewal term. Untrue! The Lease Coach regularly negotiates for a tenant allowance for our clients on their renewal. Remember, if the landlord is giving allowances to new tenants moving in, then why can’t you get an allowance too? Even if your commercial space only needs minor cosmetic upgrades, negotiate this as part of your renewal deal. After all, your tenancy is proven, plus there is less risk for the landlord putting cash into your renewal that taking a chance on a new tenant.
For a copy of our free CD, Leasing Dos & Don’ts for Commercial Tenants, please e-mail request to JeffGrandfield@TheLeaseCoach.com.
Jeff Grandfield and Dale Willerton – The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Jeff and Dale are professional speakers and co-authors of Negotiating Commercial Leases & Renewals FOR DUMMIES (Wiley, 2013). Got a leasing question? Need help with your new lease or renewal? Call 1-800-738-9202, e-mail DaleWillerton@TheLeaseCoach.com or JeffGrandfield@TheLeaseCoach.com or visit www.TheLeaseCoach.com.