What Every Doctor Needs to Know Before Signing a Medical Office Lease

By Andrew Lasky | Commercial Real Estate Broker | Medical Tenant Specialist

1. Understanding Your Space Needs

• Aim for 150–250 SF per exam room to ensure comfort and functionality.

• Consider additional areas like reception, waiting rooms, labs, breakrooms, and administrative offices.

• Plan for future growth: if you anticipate hiring more staff or adding services, negotiate "first right of refusal" on adjacent space.

2. Zoning & Use Restrictions

• Confirm the building is zoned for medical use; some office spaces are not.

• Understand whether your specific specialty is allowed (e.g., surgical centers may be restricted).

• Request written confirmation from both the city and landlord to avoid future legal or operational issues.

3. Tenant Improvements (TI) & Buildout

• Medical buildouts often involve plumbing in every exam room, lead-lined walls for radiology, and specialized ventilation.

• TI allowances typically range from $30 to $100+ per square foot, depending on lease length and landlord flexibility.

• Ask for several months of free rent to cover the time and cost of construction.

4. Lease Term & Exit Flexibility

• Longer leases (5-10 years) may offer more favorable terms, but evaluate your business risk before committing.

• Negotiate early termination clauses in case you need to close, relocate, or downsize.

• Ensure you have the right to assign or sublease your space if your practice is sold or merged.

5. Rent Structure & Hidden Costs

• Learn the differences:

  • Gross Lease: all expenses included in one price.

  • Modified Gross Lease: some shared costs like utilities may be billed separately.

  • Triple Net (NNN) Lease: you pay rent plus taxes, insurance, and maintenance.

• Watch out for annual rent escalations, typically 3-4%.

• Ask for a breakdown of past operating expenses to forecast your true cost of occupancy.

6. Exclusivity Clauses

• Without exclusivity, a competing specialist could move in next door.

• Negotiate a clause that prohibits the landlord from leasing to similar specialties within the same building or center.

• This protects your referral base and patient volume.

7. Compliance & Infrastructure

• Confirm the space is or can be made ADA compliant, especially regarding restrooms and entrances.

• Ensure HIPAA compliance for patient privacy: consider soundproofing, private check-in areas, and secure records storage.

• Verify whether the building supports your electrical, plumbing, and HVAC needs for procedures and equipment.

8. Parking, Access, and Visibility

• Ensure there's sufficient parking: a good rule is 4–6 spaces per 1,000 square feet of office.

• Patients prefer ground-floor access or easily navigable elevator systems.

• Check for signage options visible from main roads to maximize patient awareness.

9. Negotiating with Leverage

• Begin the site selection and negotiation process 6 to 12 months before your current lease expires.

• Explore multiple options, even if you plan to renew, to maintain negotiating leverage.

• A skilled tenant rep broker can help you uncover hidden concessions and savings opportunities.

10. When to Consider Buying

• If you’re confident in your location and long-term plans, owning your office can build equity and eliminate rent increases.

• SBA 504 loans allow doctors to purchase with as little as 10% down, often with favorable rates.

• Ownership also opens up opportunities for passive income by leasing space to other providers.

Want Expert Guidance?

If your lease is expiring within the next 18 months, don’t go it alone.

Contact Andrew Lasky to:

• Review your lease for free

• Identify red flags and negotiation opportunities

• Receive custom space recommendations

Book A Call Below
https://calendly.com/drew-yu/medical