Preleasing Undeveloped Property – For Chiropractic Tenants

August 17th, 2017 - Jeff Grandfield and Dale Willerton – The Lease Coach
Categories:   Chiropractic  
0 Votes - Sign in to vote or comment.

As either a new or existing chiropractic tenant, you may be tempted to prelease undeveloped property (to open a new practice or move your practice to). As we explain in our book, Negotiating Commercial Leases & Renewals FOR DUMMIES, this is potentially the most unpredictable lease agreement for a tenant to enter into. Why? The answer is simply because you can’t visually assess the property or physically touch the bricks and mortar.

 

Often in these types of deals the chiropractic tenant is required to make a long-term leasing decision and commitment based only on the landlord’s design drawings – which the landlord can typically unilaterally change. We remember one prelease deal where the landlord not only changed the color scheme and exterior look of the property (so as to save money), but also did so against the wishes of all the tenants who had signed up to date. Additionally, there are no existing tenants to talk to about how their business is doing within the property (as there are no tenants open for business yet).

 

On the other hand, some of the best leasing locations are preleasing opportunities or new properties under development, especially if the physical location or land is well situated. Just keep in mind that landlords often reserve the right to make changes to your unit without tenant consent. This can affect the size, shape, physical location of the tenant’s desired premises, the building itself, or even the grouping of buildings.

 

One trap to avoid is signing the lease agreement and then waiting months while the landlord tries to finish leasing up the property. Some landlords won’t – or can’t afford to – start construction until they hit a set percentage of done deals or leased space. The agreement with the mortgage holder may be that once the landlord gets signed lease agreements for 50 or 60 percent of the property, the funding package is approved and finalized, and then (and only then …) the property can be built. Ensure that you have a termination date in the event the commencement of the development is delayed beyond a reasonable timeline or your requirements.

 

Another ruse to avoid is where the landlord is going forward with the development but has only secured a handful of tenants. This will result in a more vacant property that your patients will not be encouraged to visit. To be successful, a proper tenant mix and synergy is required – especially for retail plazas. Again, you can look to have a right of termination in the event that there is not a certain level of preleasing achieved by a specific date or negotiate to only have your rent commence in full once the tenancy reaches a predefined level.

 

If you’re one of the first tenants signing a pre-lease deal for a new development, you may be disappointed with your new neighboring tenants. The marketing material for the new commercial property may show a great mix of potential tenants; however, this is only a wish list for the landlord. If a specific anchor or other tenant fails to materialize, this obviously affects your site selection process and even the rental rate you’re willing or capable of paying at that property. As one of the first tenants in a new property, think also of the potential headaches for visiting patients … no matter how enticing your practice will be or how much discomfort your patients may be experiencing, these people may not want to navigate a construction zone just to get to your place of business.

 

In closing, remember the biggest challenge is anticipating unknowns (timing, other tenants, the final product built) and the more you can anticipate for some of these potential hurdles through strong planning and a well negotiated lease, the better your opportunity to end up with a strong lease in a desirable new commercial property.

 

 

For a copy of our free CD, Leasing Do’s & Don’ts for Chiro Tenants, please e-mail your request to JeffGrandfield@TheLeaseCoach.com.

 

 

Dale Willerton and Jeff Grandfield - The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Dale and Jeff are professional speakers and co-authors of Negotiating Commercial Leases & Renewals FOR DUMMIES (Wiley, 2013). Got a leasing question? Need help with your new lease or renewal? Call 1-800-738-9202, e-mail DaleWillerton@TheLeaseCoach.com or visit www.TheLeaseCoach.com.

###

Questions, comments?

If you have questions or comments about this article please contact us.  Comments that provide additional related information may be added here by our Editors.


Latest articles:  (any category)

Packaging and Units for Billing Drugs
May 18th, 2020 - Christine Woolstenhulme, QCC, CMCS, CPC, CMRS
To determine the dosage, size, doses per package and how many billing units are in each package, refer to the NDC number. Take a look at the following J1071 - Injection, testosterone cypionate, 1mg For example; using NCD # 0009-0085-10 there are 10 doses of 100 mL (100 mg/mL = 1 mL and there are ...
Getting Your Practice Back on Track
May 12th, 2020 - Wyn Staheli, Director of Research
As we begin returning back to work, we will all face a new normal. The COVID-19 pandemic has changed the face of business. While it has certainly been a challenge to keep up with the ever-changing regulations (that’s likely to continue for a little longer), exciting new opportunities have also been created, such as the expansion of telemedicine. There’s also the maze of government funding that needs to be navigated and an increased awareness of OSHA standards to implement.
ICD-10-CM - Supplement information for E-Cigarette/Vaping Reporting
May 5th, 2020 - Christine Woolstenhulme, QCC, CMCS, CPC, CMRS
The CDC has released additional information and coding guidance for reporting encounters related to the 2019 health care encounters and deaths related to e-cigarette, or vaping, product use associated lung injury (EVALI).  The update offers coding scenarios for general guidance, poisoning and toxicity, substance abuse and signs and symptoms.  ICD-10-CM Official Coding Guidelines - ...
Additional Telehealth Changes Announced by CMS
May 4th, 2020 - Wyn Staheli, Director of Research
On April 30, 2020, CMS announced additional sweeping changes to meet the challenges of providing adequate healthcare during this pandemic. These changes expand the March 31st changes. The article covers some of the key changes. See the official announcement in the references below.
Effective Risk Adjustment Requires Accurate Calculations
April 27th, 2020 - Wyn Staheli, Director of Research
Risk adjustment is simply a way of making sure that there are sufficient funds to adequately take care of the healthcare needs of a certain population. It’s a predictive modeling methodology based on the diagnoses of the individuals in that population. As payers move to value based models, they heavily rely on risk adjustment to ensure proper funding.
COVID-19 Clinical Trial Participation Helps Providers Earn MIPS Credit
April 22nd, 2020 - Wyn Staheli, Director of Research
All healthcare providers who are currently participating in the MIPS portion of Medicare’s Quality Payment Program may want to participate in the new COVID-19 Clinical Trials improvement activity. Read more about it here.
Special COVID Laboratory Specimen Coding Information
April 21st, 2020 - Wyn Staheli, Director of Research
With all the new laboratory test codes that have been added due to the current public health emergency (PHE), there are a few additional guidelines CMS has released about collecting samples to perform the testing. Please keep in mind that these guidelines are by CMS and may or may not apply to other commercial payer policies.



About Codapedia by innoviHealth® Contact Us Terms of Use Privacy Policy Advertise with Us

innoviHealth® - 62 E 300 North, Spanish Fork, UT 84660 - Phone 801-770-4203 (9-5 Mountain)

Copyright © 2000-2020 innoviHealth Systems®, Inc. - CPT® copyright American Medical Association