Your practice location itself is a business tool that not only provides a place for you to practice but also projects your image to employees and patients alike. Whether you are staying where you are and renewing your lease, or contemplating a move, you are facing a very complex process with multiple moving parts. The complexity of site selection, lease negotiation and lease management has increased significantly over the past 10 years, especially in the office building market. The support of an experienced, academically qualified, technically skilled and savvy commercial real estate advisor who can manage diverse stakeholder relationships is essential.
Your advocate should understand the office leasing market and have established connections within the landlord and brokerage community.Did you know that vacancy in the downtown Toronto office leasing market is currently less than two per cent? When looking for space in this market just getting into the game can be a challenge without the right credentials and connections. In order to properly represent your interests, your advocate should have many years of practical experience navigating clients through all types of complex tenancy transactions, in all market cycles, and in various office communities. Steering tenancies through very tight landlord friendly markets requires superior ability.
Your advocate should know the buildings and know the opportunities.The right person, the right call, the right building and the right approach. You need an advocate who can take the lead in negotiations to address your current and future business needs, not settle for an “acceptable” tenancy arrangement as presented by the landlord. A competent advocate can have many issues adjusted in your favour that you may believe are non-negotiable, issues that you may not even realize could have an impact on your future business plan.
Your advocate should understand your business plan and work to negotiate a lease that supports it. Your lease needs to be just right for you, so your advocate needs to know the business side of your practice as well as you do! Your lease and your practice environment should be the end result of expert market knowledge and carefully modelled financial arrangements created with your use and future practice plans in mind. Your advocate should protect your position by minimizing your risk, reducing your operating and occupancy expenses, mitigating your exit restoration exposures, and providing future flexibilities. By having the skills and taking the time to truly understand your needs, a skilled advocate can ensure that your location and lease documentation embody your ideas and requirements.
Your advocate should understand how landlords function in order to integrate your business plan to your best advantage. Most tenants run a specialized operation that has nothing to do with commercial real estate. They only deal with their lease once every 5-10 years, so the jargon and technical structures common to leases are not something that most tenants are familiar with. Your advocate should take the extra step to ensure that you understand what your lease actually does for your practice.
Your representative should work with you, and for you.Your landlord has a team that includes a listing agent, an asset manager, a leasing manager, a lawyer, a construction manager and a property manager each representing the landlord’s needs. Each person is a specialist in their field with extensive academic training and practical experience. You need to level the playing field by retaining a specialist consultant who represents your best interests, and has expertise in each of these areas.
Having an innovative and objective advocate become a temporary member of your team to strategically negotiate on your behalf is essential. Your advocate should be collaborative, imaginative and an excellent listener who understands the entire complex process from both sides of the table, and can provide objective advice and creative solutions. Your advocate should save you time, money and stress, while strengthening your relationship with your landlord, not weakening your position. Your advocate should know that representing your practice through strategic negotiations is a serious responsibility which needs to be treated with a high level of ethics, transparency and care. PA
This article was prepared by Ian D. Toms, B.Sc. (Hons) and Jennifer J. Miles, B.A., HBA, M.B.A., Masters in Property Economics. Realty Lease Consultants, Inc. has been preserving realty leasehold value since 1986 and can be reached at (705) 743-1220, by email firstname.lastname@example.org, or through the website at www.realtyleaseconsultant.com.