Pros & Cons of Multiple Options for Leasing Medical Office

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Pros & Cons of Multiple Options for Leasing Medical Office

When looking to lease medical office property, there are 3 options within the market to consider. Each of these options has its pros and cons. 

The three choices regarding medical buildings for Lease are direct renting, subleasing, and customary timesharing. Each renting choice carries its advantages and disadvantages that might affect your choice. Fostering a superior comprehension of what they are may assist you with figuring out which renting choice should best suit your needs. 

Direct Leasing 

This is the most well-known way that most doctors and clinical specialists work and has been around since specialists initially began having patients come to their office rather than going to the patient; in the Direct Leasing scenario, the party in question signs a multi-year lease on medical office space. They have the suite all to themselves and are liable for 100% of the Lease, overhead, charges, utilities, CAMs, etc. They additionally bear 100% responsibility to maintain the suite and keep it in good working order and to the standards of typical medical office space.

Also Read: Lease vs Rent

Pros of Direct Leasing

Complete control of the suite 

Cons of Direct Leasing

  • Responsible for build-out costs 
  • A personal guarantee is often required, which ensures the Tenant of their complete rent obligation. 
  • Operating costs for the building could increase 
  • Lack of flexibility for growth 

Subleasing 

The primary thing to know is that subleasing can be an excellent option for the right situation. It provides flexibility for you without the greater liability of a traditional direct lease. Within the medical office sector, there tend to be fewer sublease options due to the long-term stability of doctors. Finding the right sublease can provide many options, from lower occupancy costs to flexibility in future growth. Subleasing is an excellent option for a new physician looking to expand into another area or a physician looking to break off from a group. 

Pros of Subleasing

  • Forthright expenses are significantly lower with subleased medical office space, and you may likewise profit from more limited rent terms and lower month-to-month overhead expenses. 
  • Since you are assuming control over a current space, the space might not require any tenant improvements

Cons of Subleasing

  • Subleasing choices might be few and far between, as the doctors and medical practices tend to be very stable.
  • You don’t hold the Lease, so if the person you are subleasing from doesn’t pay, that can eventually affect you.
  • You don’t have complete control of your Lease and decisions moving forward.

Timesharing 

Clinical places of business will work out a more modest spec set-up of 1,500 to 2,000 SF and co-op it. This is generally normal in clinical places of business on clinic grounds where the medical clinic bunch has complete control/freedoms of endorsement over everybody who utilizes the space. Usually, this implies that they will permit something that doesn’t rival their training gatherings and expect you to pay for medical clinic freedoms whether or not you use them.

These standard clinical co-ops work because one practice has selective utilization of the whole co-op space on the day or days they pay for. So there is just every one expert utilizing the space on some random day. Building proprietors with co-op units would instead not manage the administration bother of having more than one expert in the space simultaneously.

Pros of Timesharing

  • Useful for rehearses that mainly need to see patients a couple of days out of every week and can use the entire space viably 
  • A more severe level of adaptability than direct rent 
  • Commonly come pre-worked out and outfitted. 

Cons of Timesharing

  • Commonly just found in clinic-controlled clinical places of business and require clinic the executive’s endorsement of your utilization and the month-to-month expenses of clinic “advantages” well beyond the Lease (whether or not you utilize the emergency clinic assets).
  • You need to pay for the relaxed pace of the entire space regardless of whether you want that much space. Run-of-mill rates for commonly measured condo suites are $400 – $500 daily.

Please contact us if you are looking for medical property for lease or sale or have any queries regarding the same. Our team will help you with the best possible solution.

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