There are two sides to the search for medical office space. One side is the business side, the other the technical, health and safety side. Because of the special nature of medical practice and high cost of tenant improvements, medical professionals don’t typically locate in new buildings, but look for established locations. Medical practices need to revise most space to meet their special needs. So medical practitioners tend to sign longer leases than other office tenants.
Clearly, a medical office is a business office. In many ways the practice of medicine in the United States is a retail business. As such the location of the office is subject to retail business considerations of cost, location and accessibility.
- The cost to build out medical office space is much higher than that of conventional office space. Ten year office leases are the norm when it comes to medical office space, rather than the exception, in order to allow for enough time to amortize the tenant improvements.
- A medical office has to be in a convenient location, one that is accessible to patients.
- Most medical offices are located in special locations within retail settings, or in particular buildings widely known to be medical centers.
- There are also marketing considerations. New medical offices may want to be visible to new potential patients, even locating in small shopping centers.
Medical office space should be structured with some special accommodations that set medical practice apart from ordinary retail business. Medical offices have to organized to meet the health and safety requirements of the Occupational Health and Safety Administration. Medical tenants use hazardous materials and generate biological hazards. The medical equipment like X-ray machines generate radiation hazards in some offices. Accommodation for these special needs have to be part of the lease agreement. Medical offices also have to comply with considerations set out in the Americans with Disabilities Act. The space may need special access for disabled patients, wheelchair ramps and special doors. They may also need access beyond normal building hours, sometimes 24 hours. This extraordinary access may affect utility usage and has to arranged in the lease. Health care providers usually have to limit the landlord’s access to examining rooms and files to protect patient privacy.
Most medical practitioners want the provisions in their lease to prevent the landlord from renting office space within the building to any practitioner with the same practice specialty. In the case of sole practitioners, many want provisions in the lease to allow cancellation of the lease if the physician is unable to practice because of death or disability. Furthermore, constructing the ideal specialized space for medical practice often involves extensive space renovation and plumbing modification. These needed renovations often significantly increase the cost of space.
Finding space for health care practice is almost always especially demanding. Knowledge of the local real estate community can be an important asset. Please contact us to learn more.
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