Question 1

Question: How do I know if the building or space will work for my practice?

Accepted Answer

An experienced Healthcare Real Estate Professional will help you determine what your program requirements are currently and in the long term. This is critical to identify the correct size and geometry so that the facility will work for you in the foreseeable future. If the facility is too small, it may force you to relocate prematurely, resulting in a wasted investment in a facility. If the facility is too big, you may end up paying tens of thousands of dollars for space you do not need.

Question 2

Question: Is it expensive to hire an agent?

Accepted Answer

If you are acting as a tenant or buyer, you should never pay a dime for representation. In both residential and commercial real estate, the industry standard is for landlords and sellers to pay commissions to both their agent and the buyer’s or tenant’s agent. Avoid being taken advantage of by securing a qualified and well-trained healthcare real estate agent.

Question 3

Question: Can I truly save money by working with a healthcare real estate expert?

Accepted Answer

Yes, tens to hundreds of thousands of dollars. If your lease payment is off by even a small amount of money, it can add up to a significant loss of money over ten years in unnecessary, higher payments. Likewise, if you don’t receive the proper build-out period, free rent period, tenant improvement allowance, and more, you can leave the same amount of money on the table.

Question 4

Question: If tenants and buyers can hire real estate agents for free, how do they get paid?"

Accepted Answer

Because sellers and landlords pay commissions for both their listing agent as well as the buyer’s or tenant’s agent in commercial real estate transactions, an agent can exclusively represent your interests as a tenant and buyer for free. While this is definitely not a secret in residential real estate or to experienced corporations and businesses, many healthcare providers don’t realize the same is true in commercial real estate.
 
Most landlords are represented by a listing agent who specializes in helping the owner maximize their return on each transaction. We, as the tenant representative, will simply split the commission with the landlord’s listing agent. Even if a landlord does not have an agent, they still pay the tenant agent’s commission, as that is standard practice in both residential and commercial real estate.

Question 5

Question: Does a real estate agent take the place of an attorney?

Accepted Answer

Real estate agents cannot perform a legal review of your lease. A licensed real estate agent is also only permitted by law to populate blank fields on a pre-approved form contract. Suppose a real estate agent was to give legal advice, draft legal language in a contract or perform any other activity that resembles practicing law. In that case, they’re not only putting their client at risk, but they’re also subjecting themselves to severe consequences, including losing their license, risking a potential lawsuit, paying substantial fines, jeopardizing the completion of the purchase, sale or lease, forfeiting commissions and risking or permanently damaging their career.

Question 6

Question: Are there any real benefits to hiring an agent?

Accepted Answer

Saving dozens of hours of valuable time. Avoiding costly pitfalls, complications, and delays. Saving a substantial amount of money. Obtaining significant concessions. Ensuring your interests are always first and protected. Giving you peace of mind that you are in the best property and achieved the most favorable terms possible.

Question 7

Question: Is it possible for the landlord or seller to also represent me?

Accepted Answer

You cannot fairly represent two opposing parties. Both parties may have the desire to sell and purchase a practice or company, real estate, or another asset, but if one side’s desire is to get the lowest price and the other side’s desire is to get the highest price, they are competing and opposing interests.

Question 8

Question: Can't I always just choose to do my own negotiating?

Accepted Answer

Unfortunately, many tenants and buyers try this approach, only to discover they are not sure if the property or space is the best location or option for them. More importantly, they are not sure they are receiving the best terms.

Bringing in a healthcare real estate agent anytime in a transaction is better than going it alone. However, the longer you wait and the more you try to accomplish on your own, the harder it is for your agent to undo mistakes and expedite the transaction. Your agent would need to undo any communication errors you potentially made, begin the process over from where it should have been at the beginning, and navigate a seller, landlord, or listing agent who is probably frustrated at that point of a transaction.

You can save yourself a lot of wasted time and energy by hiring the most qualified representation you can find. Then, let them direct the process and achieve the most favorable results possible.

Question 9

Question: Do I need a negotiator as my agent?

Accepted Answer

You should never pay anyone to be your agent if you are a tenant or buyer. While you should always have an attorney review any legal contract in every transaction, the attorney should not be finding properties or negotiating economic or business deal points any more than your agent should not be drafting legal language. The best attorneys won’t try and be real estate agents. Likewise, the best real estate agents won’t even consider drafting legal language or telling you they can be your attorney.

Question 10

Question: What is the big difference between residential and healthcare real estate?

Accepted Answer

There is a vast difference between residential and commercial real estate. The best residential agents wouldn’t even consider doing a commercial transaction, and the best commercial agents don’t dabble in residential either. Each sector has a very different approach to the market, and commercial real estate has dozens of additional business and economic considerations that residential real estate does not have.

A residential agent typically makes value determinations solely based on comparable properties in the market. On the other hand, a commercial agent understands how concepts like tenant improvement allowance, build-out time, free rent, annual escalations, and other options impact profitability.

Question 11

Question: Does the landlord pay a commission for the tenant?

Accepted Answer

Yes, landlords pay commissions for the tenant’s agent and their listing agent on both new leases and lease renewals. Every large national corporation knows this, as do most business owners. Some landlords will try to intimidate a smaller or local tenant and claim that brokerage fees are not paid to agents for lease renewals. However, this is simply a posturing tactic. Many landlords assume healthcare providers are unsophisticated and don’t know better about commercial real estate; unfortunately, the majority don’t. Landlords are notorious for using intimidation and scare tactics to force inexperienced tenants to forfeit their rights and opportunities.

Question 12

Question: What if my consultant or an attorney wants to be involved?

Accepted Answer

There is no need for a consultant or attorney to be involved. Communicate that you want their help in the area that they specialize in, but the key to achieving the best terms possible is having each partner on your team perform the task and responsibilities they are most qualified to perform.

Let your consultant be the consultant and your attorney be the attorney. Likewise, your agent should never try to be an attorney or another critical partner on your team.

Question 13

Question: Should I hire an attorney?

Accepted Answer

Yes, lease and purchase contracts are legally binding documents. You receive the benefit of occupying and/or owning the space or building. With that benefit comes obligations of what you must do to maintain that occupancy or ownership.

When looking for an attorney, your healthcare real estate agent should be able to give you the names of several attorneys you can interview to determine who can offer you the best combination of value, protection, price, etc.

Question 14

Question: Isn't it easier to simply call the listing agent myself?

Accepted Answer

One of the most common mistakes a tenant makes when looking for real estate for their practice is to contact a listing broker to get information and then inadvertently begin working directly with the listing agent or owner. This can be such a costly mistake because healthcare providers typically do not understand the dynamics of the relationships involved.

Question 15

Question: How can it be that new tenants get better deals on lease renewals than existing tenants do?

Accepted Answer

It should not unless you have poor representation and do not fully understand your options. It is easy for a landlord to take advantage of a tenant who attempts to go it alone, hires an unqualified agent, doesn’t fully understand all their options or the market, and doesn’t have the correct approach. They would love to charge you more than they should and give you fewer concessions than a brand-new tenant would receive.

Question 16

Question: What makes HFS different than other healthcare real estate brokers?

Accepted Answer

HFS is a leader in healthcare real estate brokerage and design.

We take great pride in helping dentists, physicians, physical therapists, and veterinarians improve the success of their practice.

Whether you are opening a new office or expanding your existing healthcare facility, HFS has the expertise you need to navigate the cumbersome process with a single source of accountability.

Our professional services include real estate brokerage, feasibility studies, space planning/test fits, architectural and interior design, design-build, and advisory services.

We represent the interest of every type of healthcare specialty and truly understand the nuances and unique design needs of your practice.

Our experts handle all the details and logistics using our proven process, allowing you the time you need to focus on what is most important, your practice!

Question 17

Question: If tenants and buyers can hire real estate agents for free, how do they get paid?

Accepted Answer

Because sellers and landlords pay commissions for both their listing agent and the buyer’s or tenant’s agent in commercial real estate transactions, an agent can exclusively represent your interests as a tenant and buyer for free. While this is not a secret in residential real estate or to experienced corporations and businesses, many healthcare providers don’t realize the same is true in commercial real estate.

Most landlords are represented by a listing agent specializing in helping the owner maximize their return on each transaction. As the tenant representative, we will simply split the commission with the landlord’s listing agent. Even if a landlord does not have an agent, they still pay the tenant agent’s commission, as that is standard practice in residential and commercial real estate.

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