Author: Manfred Purtzki
Leasing dental clinic space? How to deal with the landlord.
In most cases, the “landlord” will be a corporate entity, not a person. In either case, don’t be surprised if negotiations turn confrontational. It often depends on the market as to who has the upper hand.
If vacant retail space is abundant and the landlord has been advertising for a long time, the tenant has a bargaining advantage. The reverse is true if ten people are vying for the space you want, then your bargaining power is significantly diminished. In my experience, metropolitan areas have experienced a shortage of good retail space for some years.
In my early career as a dental start-up business consultant, the rental business was a little simpler. You dealt with the company’s owner in person (the landlord), read a reasonably simple lease, negotiated the details, signed it and moved in.
Today, the lease you will review will likely be a simplified version. Your lawyer will review the full version of the lease. Hopefully, they are experienced in dealing with leases for space specifically to be used for a dental clinic and protect you from anything egregious. The big question is, who negotiates with the “landlord.” I recommend that dentists should never meet, let alone negotiate with the landlord or their representative.
Never let your lawyer negotiate your lease; leave this to your dental start-up consultant; they will get you the best possible deal. The difficulty with lease negotiations is that they are a zero-sum game. There is no win-win; a monetary gain for one side is a monetary loss for the other.
However, you have an advantage; dentists are one of the most desirable tenants. Why? Because of their financial stability and desire for long leases. The challenge is that this advantage becomes less significant in a tight leasing market.
The big takeaway is: stay out of the lion’s den.