Is your lease negotiation strategy right for you ?
Healthcare providers are the most coveted tenant type. What follows is not legal advice but a series of short think pieces on lease negotiation strategy for doctors, dentists and healthcare entrepreneurs looking to build a practice in New South Wales.
Become predetermined
6 December 2024
The challenge of making an accurate leasing decision lies in the complexity of leasing. Due to this complexity, it can take years to recognize you could have taken a better path, that the risks you took will not be rewarded. The antidote is to predetermine your leasing decisions.
A predetermined decision is one set up ahead of time based on an accurate understanding of how leases operate. Leasing decisions are set up by modelling. Identifying what is, and is not, compatible with your business objectives and creating a complete lease model against which to test offers received from landlords.
If the offer is compatible, you take the next step. The power of a predetermined decision is that you remain calm in total, quiet control. Happily immune to high pressure sales tactics because your decision has already been made. There is no spur of the moment, no getting caught off guard.
The path between where you are today and where you want to be – can be predetermined.
26 November 2024
A human being is making the decision. Human beings are largely irrational. It is naïve to go into a negotiation and think the process is going to be fair.
Persuasion v. negotiation
22 November 2024
Persuasion is easier than negotiation. Landlords can be persuaded – to a point. After that, the discussion becomes crowded and transactional.
The ordinary understanding of negotiation is the trading of concessions or the swapping of compromises. In commercial leasing, it can be ugly and confronting. Why should a tenant compromise its business case or for that matter, its profitability ? How do you stop a tenant from over-compromising ?
Not everything is a flex
11 November 2024
If the landlord’s offer falls below your MVL, you walk. That’s the whole point. Keep your pen in your pocket. Why compromise your way to a “win” if it means climbing the wrong mountain ?
Rude
3 October 2024
An agent can rattle an inexperienced tenant into increasing its offer by literally doing nothing.
It is not uncommon for agents to disappear and ghost prospective tenants, especially first-timers. Often misdiagnosed as rudeness on the part of the agent, tactical delay is an effective negotiating tool.
Calls go unanswered, messages unreturned, emails unread. Faced with an unexplained delay, some first-time tenants can become overwhelmed with uncertainty and self-doubt. Unable to tolerate the emotional distress, they increase their offer to restart the discussions.
Ta-da ! The agent magically reengages.
It happens, a lot.
The three pillars
28 August 2024
A tenant rationalizing a leasing decision with “I am never going to sell this business” is often prophetic.
A good lease allows a tenant to do three things : (1) trade profitably; (2) avoid landlord interference; and (3) sell the business on favourable terms.
On these three pillars rests a tenant’s business case. Compromising one weakens the others.
Better to ask : will agreeing to this make my business more profitable, stronger and more valuable ?
Ignoring this stuff doesn’t hurt straight away. Your new practice is going to look great and win a bag a design awards. But the day will come. All leases end.
Stop
24 August 2024
Tenants have only a brief window in which to exert control and win. Once that window closes, a tenant’s negotiating power fades fast. Timing is everything. If you have a heads of agreement for your new lease – stop. Receiving a heads of agreement is your signal the window is closing.
Dwell time
16 August 2024
Staying with shopping centres, let’s look at what motivates leasing decisions on the landlord’s side.
Keeping it simple, shopping centres want two things. One, shoppers to spend more money in their centres. Two, tenants whose businesses keep people in their centres for longer – why ? So they spend more money. Duh.
Time a shopper spends in a centre is called “dwell time”.
The principal benefits of medical or wellness offerings is that they draw people, slow shopper traffic, increase dwell time and support anchor tenancies (the big supermarkets).
The shift to “meditail” is nothing new. However, don’t expect centre management to bend over backwards. The leasing process is a game. It is not fair. Health care operators are the prize. The leasing process with it’s standardised forms and policies is designed to rob tenants of the will and power to negotiate. Tenants can derail the process.
Dwell on that.
The cost of convenience
12 August 2024
Rent, percentage rent, outgoings, marketing and promotional levies, tenant contributions, category one costs and all the others are just part of the true cost of meditail leasing in a shopping centre.
In reality the cost extends a lot further. No exclusivity of use (yes, the landlord will invite others to compete against you), the landlord may (will) redevelop the centre and those works will interrupt continuity of care. The landlord may choose to relocate you or demolish your premises at any time (they will give you a polite heads-up of course) and last but not least, you will likely be required to upgrade and refit the premises as often as the landlord requires. PS, no guarantee of foot traffic.
Shopping centres
6 August 2024
Healthcare providers wishing to add more convenience to their patients experience often take spaces in shopping centres because of the promise of ever increasing foot traffic and accessibility.
This promise, alluring as it may be, comes at a price. Whether the price is worth it time only tells. In these posts we look at some quick shopping centre realities and test them against optimal lease modelling.
Short leashes
5 August 2024
Long leases are generally anathema to shopping centre landlords.
Consumer demands and expectations are ever changing. What was “peak” or “on trend” five years ago, may be considered old-hat and irrelevant today. The challenge for shopping centres is to stay ahead of the game by increasing the pleasure and excitement of shopping. It is this game that a healthcare operator is required to play.
Centres future-proof their environments by keeping a tight leash on their tenants. Short leases give the centre control over the type, number and quality of retailers. This way, things stay fresh.
Does the business case for a healthcare operation call for a short lease ?
Ebb and flow
29 July 2024
Not all lease outcomes are equally important all of the time. A landlord applies a different weighting (importance) to each depending on where they are in the leasing process.
Sometimes the idea of a reward outweighs the risk of loss. In other words, during a negotiation landlords oscillate between being risk seeking or risk averse. This is important for tenants because tenants must learn to read the play. If a tenant can detect the moment a landlord is open to risk (risk seeking) that’s a good time to pounce.
Bolting horses
26 July 2024
The old customs of legal practice frown on one lawyer amending another lawyer’s lease unless the lease does not reflect the intention of the parties. With leases, that intention is discerned from the heads of agreement. If it is not in the heads of agreement, the tenant has Buckley’s of changing the deal later.
Put another way, by the time the lease paperwork is received the negotiation is long over. At this point, lawyers rarely negotiate. What typically happens is the tenant’s lawyer produces a shopping list of issues the tenant wishes he knew about before he signed the heads of agreement.
Right advice
19 July 2024
The call to get the right advice early is dotted throughout these think pieces.
Generally, advice has to be well-timed. What good is getting advice after it was needed ? In the context of lease negotiations, that time is before terms are discussed. Moreover, advice should be capable of being acted upon. What good is well-timed advice if it is fluffy and aspirational ? A tenant needs direct, actionable insights from someone who knows the way.
Having clued-up, a tenant should be clear on three things. One the tenant’s optimal lease. Two, the tenant’s minimal viable lease and (importantly) three, how to get there.
Risk tolerance
18 July 2024
Not all healthcare entrepreneurs have the same tolerance for risk.
Fundamentally, risk is about the likelihood of something happening and the consequences of it happening. So if something is highly likely to happen but the consequences are not so bad, it could be an acceptable risk. Conversely, if it is unlikely to happen but the consequences are a disaster, that might be an unacceptable risk.
The failure to identify and moderate lease-risk falls on the tenant. If a risk is unacceptable and the tenant decides the deal needs to be declined, is it better for the tenant to walk away after one day or after months of negotiations ? Get the right advice early – do not leave it to the lawyers.
Popular
- The optimal lease
- The minimum viable lease
- Dark corners – hidden build costs
- Landlord’s dream tenant
- The real market
- Burning cash
- Design loops
- Found a place ? Keep looking
- Sunk cost bias
Leave it to the lawyers
17 July 2024
Hearing the phrase “leave it to the lawyers” or “the lawyers can work it out” should elicit an immediate, visceral reaction. Delaying difficult conversations is a subtle yet effective, heuristic in the landlord’s sale cycle.
Heuristics are a shortcut for solving problems in a quick way that delivers a result that is sufficient enough to be useful given time constraints.
A leasing agent wants to short-cut to a signed lease proposal as quickly as possible. Blocking genuine discussions of risk until the tenant signs the proposal and the deposit paid is good business for the agent. Once that is done, sunk cost bias comes into play.
Delaying difficult conversations is a rookie move. The quicker problems are fixed the better. Also, lawyers rarely “work things out”. Once the lease is drawn up, the only thing the landlord’s lawyer is interested in is the tenant’s signature.
Low voltage
16 July 2024
Sometimes, the failure to correct the imbalance of risk in a lease is self-inflicted.
A tenant under pressure to get the keys may be prepared to overlook unfair provisions in the lease because put simply, he will not get the keys until he signs the lease.
The key here is to reduce the pressure.
The best leasing decisions are made in low-voltage environments. Assembling and priming his lease team early, a tenant is less likely to fumble timing. A simple example, would it help to know the readiness and capacity of the builder to start the fit out before agreeing to a handover date with the landlord ?
Reliable wins
10 July 2024
Generally speaking, landlords want one thing – a reliable, passive income that comes from secure and uninterrupted cash flow from a quality tenant. A quality tenant is reliable, capable of delivering a consistent and increasing rental income year in year out.
Landlords know not all tenants are as valuable as others. Some are unreliable. So they look for tenants with sound, long term business models who would be reluctant to leave. They know tenants who spend hundreds of thousands of dollars (if not millions) on specialised fit outs and generate location specific goodwill are unlikely to be enticed to move by cheaper rents up the road.
Medical and dental practices will typically outlast all other tenancy types. In the eyes of a landlord they are reliable and therefore more valuable.
You are the prize. Landlords must compete for the privilege to have you as a tenant.
Keep looking
1 July 2024
Having found a good location – of which there are plenty – many tenants stop looking putting all their eggs in that one basket.
Tenants would do well to cultivate interest in alternative sites simultaneously. Not only does that help the tenant zoom out and provide perspective on what other landlords in the same market are prepared to offer, but it delivers leverage. The power of choice. The quiet confidence to make bold, positive decisions knowing that if one deal does not work out, there are others equally attractive to choose from.
Leverage and positioning are an inside job. A tenant can choose to explore multiple sites – or not. It is a choice.
Position v. “positioning”
28 June 2024
Healthcare tenancies are coveted by landlords for many reasons, the most basic being the promise of a stable, long term rental income.
Better positioning not only differentiates dentists from the mass of other potential tenants, it strengthens their prospects in the negotiations.
In negotiations, a “position” is a number or outcome around which one party rallies without much regard to the genuine interests of the other party, or their own for that matter. In its extreme, a position ends up at “take it, or leave it”.
On the other hand, “positioning” is the process whereby a tenant signals its value before negotiations start and adopts the role as the pursued (the prize to be won), not the pursuer.
Would the landlord like a dentist in the building ? No, move on. Yes, why does the landlord think a dentist would do well here ?
It is subtle.
Sinking feeling
21 June 2024
A sunk cost is a cost that has already been incurred and cannot be recovered.
There are many potential sunk costs for tenants when exploring a new site. When faced with a business decision, the sunk cost bias is the tendency to justify further expenditure instead of cutting one’s losses – “we have come this far, we might as well press on”. It is akin to continuing to climb the wrong mountain.
Blinkered by sunk cost bias, progress can be preferred to prudence. For this reason, tenants would do well to limit sunk costs and not to over invest in any particular deal.
Choices
17 June 2024
A new tenant has the power of choice.
A new tenant can choose to plan, assemble a team of expert advisors, seek advice early, give shape to its optimal and minimal viable lease models, search for opportunity where the offering is more likely to be compatible with its business case and negotiate where they have a natural advantage – or not.
Lease team
12 June 2024
No tenant is an island. A lease team is a group of preferred professional suppliers for finance, compliance, accounting, design, build and other inputs on the critical path to building a new practice.
Assembling preferred team members before searching for premises is strong move. A tenant who has completed the sales-cycle with its team can move quickly when presented with opportunity.
Without a team behind them, a tenant is more likely to fumble decisions including those that increase the burn rate.
When ?
11 June 2024
Few tenants are genuinely ready. Landlords know this.
Waiting for the tenant to get his ducks-in-a-row is not good for business. Instead, tenants are often pressed to agree to an arbitrary start date, usually reckoned from today.
Six week fit out period ? Great. The 6 weeks starts from today. Rent free period ? Sure, let’s start the clock on that too.
Agreeing to a start date that does not cover-off basic lead times is a tell – a big clue the tenant is a rookie.
Why should the tenant de-risk delays for the landlord ? Delays in preparing and finalizing documents, old tenants not vacating on time, drags on getting consents and approvals are just a few possible time-sinks. Burning time is burning money.
Burning
10 June 2024
The “burn rate” is the speed at which a company consumes its cash. The same applies to a tenant spending money fitting out its premises.
A slow burn rate is good.
The burn rate applies to non-cash resources such as rent free periods. Rent free periods are burned by delay.
Banks, councils, licensing authorities, owners corporations and builders all play by their own rules. Managing delays requires an understanding of the critical path – who must do what by when to keep the build on time and on track.
By understanding the critical path, the tenant can minimize his exposure to foreseeable delays.
Point of view
6 June 2024
The think pieces to date and those that will follow are an expression of a novel point of view developed over years of observation.
By and large, leases are the product of system designed to rob the tenant of control. The leasing process in inherently unfair. Get used to it.
The art of lease negotiation is a narrow topic, here it is viewed through a very specific lens – the belief that healthcare tenants need a north star to guide them. The trajectory is set by the tenant but if an offer does not significantly overlap with that trajectory then flick.
Get uncomfortable
5 June 2024
The easy thing to do is to politely respond to the tenancy application form, to follow the path the landlord has laid out rather than push back and challenge the process.
Conforming to this process robs the tenant.
Shopping centres require tenants sign the same lease to aid in the management and administration of the centre. In effect, the process commoditizes tenants stripping back their character and their offering into one homogenous tenancy “mix”.
In this world, a dentist and GP have the same goals and sign the same lease as a kebab shop. Healthcare practices are not fodder. They will do well to understand their intrinsic value and why they are the coveted tenant type.
Comfortable negotiation is not the aim. Derail the process.
Strong decisions made early
4 June 2024
Instead of looking for the best deal, tenants should become better at disqualifying the bad ones. For a prospective tenant, a bad deal is one that does not match its criteria for a minimum viable lease.
Armed with a MVL, prospective tenants have the upper hand provided of course, they use it. A prospective tenant should expect to walk away from any number of incompatible deals. It is only by saying no, can a tenant then meaningfully say yes to a good deal. Do not be afraid of starting and restarting the search. Disqualifying bad deals is part of the process.
Poker face
3 June 2024
At each end of the spectrum, tenants may either be negotiating with an idealist landlord or a poker playing one – but it’s usually a mix of both.
Idealists view negotiation as a serious exercise with serious consequences expecting the other side to be motivated by what is universally fair and just, honest and transparent. By default they aim for a WIN : WIN outcome. Idealist landlords – if they do exist, are rare.
Poker players do not trade on trust or fairness. What is right or wrong depends on the situation. These sorts of landlords see negotiation as a game. Whilst they do not cheat, they see no problems in changing the rules. In the extreme, think used-car-salesman.
Lease negotiations can be uncomfortable. Over-reacting to salesmanship on the part of a leasing agent is a “tell”. A behavioural cue that inadvertently reveals information about the strength of a person’s hand, in this case a tenant’s position.
Not returning calls, short dismissive emails, silence and unexplained delays are all part of the game designed to elicit such a tell.
Zoom out
30 May 2024
Often the only thing that can give a would-be tenant reliable perspective is distance. Distance allows you to zoom out and see the bigger picture. In leasing, not having regard to the bigger picture is foolhardy.
The big picture will ultimately determine whether the decision was a good idea. Without it, a tenant may well climb the wrong mountain – getting a great deal on a dud location or vice versa. Perspective comes from cold detachment. Cold detachment is power.
However glib this may sound, the landlord leasing the site to another provider is not the end of the world. Zoom out. Surround yourself with big-picture professionals. Better to climb down off the wrong mountain than to keep going and reach its summit.
Zoom out.
The sale is the sample
23 May 2024
New tenants dealing with a heavy handed leasing agent will do well to remember if the sale is bad, the deal will be bad. Of course there are some rare exceptions but put simply, good deals do not happen in a bad way.
If a tree produces lemons, it is a lemon tree. If dealing with a leasing agent produces stress, anxiety and uncertainty, the tree will give more of the same during the negotiation stages. An antidote to the usual sales venom is the confidence that comes from knowing the minimum viable lease. Without an MVL tenants are more susceptible to high pressure sales tactics.
Building blocks
21 May 2024
Competition for healthcare fitout work is fierce. Evaluating competing proposals from builders is no easy task. To compare apples with apples tenants need to give appropriate weighting to different parts of each proposal, not just the price.
Without diving into the world of construction contracts, prices can change. To avoid surprises, tenants would do well to spark a conversation with respectable builders before starting their search for premises.
To their credit, the best builders invest time in nurturing relationships and guiding clients along the path. These builders align their processes with the success of the tenant, not simply winning the job. Happy for a client to not compromise its business case, their language and behaviour are tenant-centric.
One compelling factor is the strength and reassurance they can provide a tenant when preparing for lease discussions. Without their builder a tenant cannot complete its optimal lease modelling and put plainly, would be negotiating blind.
Optimal lease
17 May 2024
“Optimizing” a lease means to define the highest and best form lease for a tenant’s business case.
The process takes place behind closed doors, not involving the landlord. Calmly and methodically, lease terms and conditions are dissected and their future operation and potential impact on the tenant explained so as to give shape to the best outcome in each scenario.
For balance, the process requires input from other professionals on the lease team to identify the best-case-scenario for build, finance, compliance, valuation, insurance, asset protection (and so on).
On its face, the benefit of an optimal lease is that it gives the tenant a north star, providing context and a scoreboard for negotiations with the landlord.
Looking deeper, the real advantages include the tenant engaging and priming its lease team early and being able to understand and define its minimum viable lease. For a tenant, not knowing the minimum viable lease is self-sabotage.
Minimum viable lease
16 May 2024
A minimum viable lease (MVL) is the most basic version of a lease needed to satisfy a tenant’s business case. Unlike an optimal lease which ticks all of the boxes, the MVL secures only those elements that are essential.
When formulating an MVL, there are some realities of negotiation to keep in mind. One, a landlord is unlikely to agree to everything required for an optimal lease. Two, each side puts different value on different parts of a deal.
Negotiation is the process of trading concessions towards an acceptable outcome. The MVL is therefore the lowest “win” the tenant must achieve to remain on target. It allows a tenant to trade low-value concessions without compromising its business case.
In real terms, the value of an MVL is to give a tenant the confidence to walk away. Confidence is power. Knowing its minimum interests, a commercially minded tenant can play a bold hand. Sadly, most tenants negotiate with no compass, no way to track progress and no idea of the minimum acceptable standards.
Dark costs
15 May 2024
In building terms “latent” means something at the site that could not reasonably have been anticipated by builder at the time of quoting the job. Lease wise, a hidden condition means a clause in the lease whose operation is not immediately apparent but has the effect of increasing the effective cost to the tenant.
The ability to identify, anticipate and de-risk latent and hidden conditions is critical.
Design loops
13 May 2024
Landlords, particularly in shopping centres and retail precincts, may require a tenant to prepare and submit draft fitout plans for approval. The landlord charges the tenant to approve the plans. If the landlord rejects those plans, the tenant pays for new plans (and the cost of the landlord reviewing them) until they are satisfactory to the landlord. It can be a vicious and expensive cycle.
Value drivers
2 May 2024
Value drivers push the appraised value of a medical practice up. The opposite of a value driver is a value detractor, which surprise surprise pushes the value down. The earnings multiple is arrived at by balancing the two.
The lease is a bellwether of practice value. It is full of potential value drivers and detractors.
It almost goes without saying, a medical startup needs to secure as many drivers as possible. Most cost nothing. They are there for the asking and up for grabs before the heads of agreement is signed. Miss enough drivers, the practice may well be unsellable.
Earnings multiple
30 April 2024
One informal approach to practice valuation is to multiply earnings.
The multiple to be applied to earnings depends on various risk/reward factors subjective to the practice. In simple terms, the practice scores or loses points for how easy and risky it is to run.
Multiples are drawn from experience rather than valuation theory and depend on the quality of data available on comparable transactions in comparable markets. They are applied as a rule of thumb and are not intended to be strictly accurate or reliable.
However, rules of thumb are handy because they demonstrate how healthcare operators can look to increase the value of their business by either increasing the earnings, the multiple or both.
Impairment
29 April 2024
An “impaired lease” is essentially a lease that is diminishing in value. As it approaches expiry, the value of the practice – of which the lease is an asset – falls as the lease slowly converts to a liability.
Impairment is a product of time decay and it happens a lot earlier than most expect. It is a numbers game all tenants play. Which is why exit planning is a key pre-lease negotiation filter. Play the long game.
Knowing the ropes
26 April 2024
The leasing process has been designed to shrink time-to-revenue for the landlord and its leasing team. Checking the lease is a good fit for the tenant is not part of that process.
The sole determining factor of a good fit is whether the deal meets the tenant’s business case.
Business cases for a dental practice lease, for example, are no more than half a page and can be arrived at through honest conversation.
At the idea stage, before any contact with a potential landlord is the ideal time to reach out for a chat. Because there, at the very beginning the war is won.
Options
22 April 2024
Any discussion about the “length of lease” is more accurately about the maximum permissible lease term.
For example, a reference to a 20 year lease is to a 20 year maximum term (broken up into smaller option periods). So if the tenant chooses they can extend for up to 20 years. Not to be confused for a straight 20 year commitment.
The key is flexibility. Options to extend provide that flexibility. The length of lease and its options requires very slow, careful consideration.
Frogs and scorpions
15 April 2024
This fable perfectly illustrates the tension between risk and reason.
A scorpion wants to cross a river but cannot swim. It asks a frog to carry it across. The frog hesitates, afraid that the scorpion might sting it, but the scorpion promises not to, pointing out they would both drown if it stung the frog in the middle of the river.
The frog reluctantly agrees. Midway across the river, the scorpion stings the frog dooming them both. Dying, the frog asks the scorpion why it broke its promise to which the scorpion replies “I couldn’t resist. It’s my character.”
Fat triangle theory
14 April 2024
Think of the medical practice resale market as a big fat triangle. The higher the price, the smaller the market.
Just as property developers build spec houses, practices can be designed to appeal to the maximum market possible in anticipation of a sale
If you are building a practice the best time to understand the market is before you sign the lease. Don’t know the best buyer type for your practice – slow down.
Winning
12 April 2024
Winners negotiate leases buyers want. Full stop.
Business case is king
9 April 2024
A business case is a balanced and well-reasoned statement outlining the why, what, where and how necessary to decide if it is worthwhile pursuing a lease of a particular site.
The lease is a whole-of-business bet. To its core, it must be fundamentally compatible with the business case. Rookies find a site and then build a business case for leasing it, not you. The business case comes first. Then the search begins. There is no other way. Diagnosis precedes prescription always.
Armed with a business case, your search becomes clearer and your positioning (power in the negotiation) skyrockets.
Power
7 April 2024
Power in a lease negotiation comes from deep understanding of process and positioning. The steps and how they relate to each other is the process. The person who is perceived as wanting it less than the other guy has the power – that is positioning.
Perceptions play a huge role. Medical practitioners are the most coveted tenant type. You are the prize. If landlords are not accommodating you, you have been outflanked.
Leasing systems are designed to commoditize tenant relationships and position the landlord as all powerful and indifferent. They are not.
Derail the application process. Do not play “their” game. You are the prize.
Your real market
6 April 2024
If you are investing hundreds of thousands of dollars building a healthcare practice, you are not in the health services market. You are in the healthcare practice resale market.
Let that sink in.
Under the bus
31 March 2024
Quality advice comes from a place of indifference, bordering on apathy, as to whether or not a deal proceeds. Assume the default position that salespeople will put the interests of the sale first, not yours. The agent works for the landlord, not you. A tenant can only meaningfully promote his interests by having a fully developed business case and advice from someone removed from the sales process.
The are some really good people in this space that would never prefer their interests to those of their client, and would not throw them under the bus for the sake of a fee. Find them.
Second opinions
27 March 2024
Have a sneaking suspicion the dollars are getting in the way of the truth ?
There are no surprises in leasing. It’s all there in black and white for you to see before you sign. But what if your people don’t know where or what to look for, or if it’s gone too far too fast and you are not sure how to handle the sales pressure ?
Get a second opinion from someone who is uninvolved in the deal and has no vested interest. Your sounding board needs to be able to explain to you what makes a good deal, or a bad one.
Not all leases are the same.
The best possible
21 March 2024
Getting the best “possible” lease may be the worst thing to do.
A well prepared tenant should be able to answer two basic questions. One. Will committing to this site, at this occupation cost on these terms meet the business case for investment ? Two. Will this lease support a sale of business unlocking an appropriate return on capital invested ? No. End of story.
Pre-lease a tenant has incredible power. Don’t waste it.
Tick tock
11 March 2024
Over time, all leases become either an asset or liability to the tenant – and it is the tenant that chooses.
Success is not accidental. Magnified by time, small positive decisions made early in a deal compound to great benefit. Similarly, small compromises contrary to a tenant’s business case will fester. Time magnifies everything.
Surrendering
25 February 2024
If a tenant cannot articulate its business case before a lease negotiation, it has surrendered its advantage.
Telltale signs of a non-existent business case include hearing things like “the agent is chasing me”, “I don’t want to lose this site” and the old chestnut – “I just want the best deal”.
All that glitters
6 January 2024
On the journey to practice ownership, startups have a choice. Hold out for the right lease, or sign the one they are offered. Getting the “best deal possible” where the best outcome would be to walk away is no achievement.
Fast horses
11 December 2023
Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses.”
New tenants know what they want, but few know what they should want.
All projects start with a small, pilot engagement in which a needs analysis is completed. Based on those results tenants are taken through a mandatory exercise in which an optimal lease for their practice type (dental, GP etc) is modelled.
Once they see what that looks like, few stick with the horse they thought they wanted.