We will be sharing a series of posts about how we found our real estate space. Most folks rent their own space, with leases typically around five years (three to seven is typical). One HUGE factor in how soon you can open your office depends on how long it takes for tenant improvements. If it’s a empty shell and you need to design the floor plans and get permits and get contractors, it’s gonna take a lot longer if it’s a previous psychologists office where the rooms just happen to be the right size (this was actually my situation, I totally lucked out).
Some folks will sublet a space, but once you get busier and want your own space this creates the headache of having to find your own space and still run your practice at the same time. See this blog post for more details on different ways to start up.
Getting your lease signed is a critical step in your startup because incorporating your business, opening a bank account, and credentialing are all contingent on your business address. Some folks use their home address or their lawyers address, but we believe is is more hassle than it’s worth.
You could begin to look for commercial properties on http://www.loopnet.com but I would highly recommend getting a commercial real estate agent. Even among commercial real estate agents, there are different types; some of them specialize exclusively in medical. You can use the internet, your local medical society, or colleagues in your area to find a real estate agent. Then interview three of them. Here is a post with some questions to ask them. Compare answers, and choose who you want to work with. The agent I chose was the most prepared, telling me how all of his previous work experiences would help him represent me, as well as coming to the meeting armed with packets of information about the medical real estate market in Phoenix, including properties he suggested we look at. Make sure your agent represents tenants and doesn’t try to steer you into properties that they represent the landlord. Finally, many of the bigger agents will usually work with properties ten to twenty times the size of what you’re getting. Be sure that they have enough time to give you attention, or if they are handing you off to the newest associate in their group, that they have the experience to help you!
This is a important (and very scary) step of your startup, but keep in mind that the office you choose isn’t forever. We know a lot of doctors that move, or open up a satellite office, for various reasons. Ho Sun’s landlord sold his building so he had to move. Other colleagues open up a office, and as soon as their restrictive covenant expires they open up next door to their previous practice. Some other docs outgrow their old space and look for a bigger building. Finally, some of our colleagues decide that they want to own their own building (more posts will follow about the pros and cons of this).
We will go into more detail about how our actual floorplans looked like. One advantage of joining our google group is that you get other ophthalmologists to critique your space and floorplans.
2 thoughts on “Looking for a office space”
This is a very useful post. I am currently in the stage of my lease running out, and finding myself interested in owning a building rather than continuing to lease. There is no option to buy the current building unfortunately. The steps you have listed to find the right broker are very helpful. Is there a post, or anyone out there who has purchased a building and would like to express their happiness/regrets?
Hi Kevin, are you still part of our google group? A few people have discussed the pros and cons of buying vs leasing. At any rate we’ll have a post on this eventually!
For me, I like my location now and the size fits me fine. Although there are tax advantages to buying, I personally prefer diversification of assets and trust the stock market over real estate. Can’t see myself putting down so much equity in one single illiquid asset. Did you see the debate in our listserv about how personal housing isn’t a good investment?
Also you can’t change your location or size. And for someone who wants to retire early who knows if the buyer of my practice might be interested in buying the building too…