Look for an Agent to Represent You and Only You
A commercial real estate transaction can have a major impact on your medical practice. Done right, it can save hundreds of thousands of dollars, help market your business, give patients a positive experience and, in the case of a purchase, produce a tangible asset.
Done wrong, it can leave you with a facility that does not suit your needs, does not attract business and does not provide a great experience for patients. It can also be costly. Even one small mistake on a lease or purchase can cost hundreds of thousands of dollars.
Because real estate is often the second-highest cost for a practice behind only personnel, real estate negotiations should be handled by an expert. An agent who understands the market and your practice can be a major asset in negotiations, but it has to be the right agent. A reputable agent should represent your interests and no others.
Wrong Agent Warning Signs
You can protect yourself and your business by identifying these five warning signs that you might be picking the wrong real estate agent.
- The agent only shows one property at a time. As a business owner your time is valuable. You should be looking at multiple properties and evaluating them simultaneously. This gives you leverage in your negotiations, back up plans in the event your first choice doesn't work out and a snapshot of the market in a competitive environment. When you can, you should have multiple options so you don't miss a good deal.
- The agent is on the flier for the office you are evaluating. You are entitled to dedicated representation. If the agent you're working with has a listing agreement with the landlord, their fiduciary responsibility is to maximize that landlord's profit. They cannot represent your best interests at the same time. You can avoid conflicts of interest by signing with an agent that specializes in buyer/tenant representation.
- The agent is asking you basic questions about your business. Questions like “how long of a term do you want?” or “how long does your construction typically take?" are red flags that demonstrate the agent does not understand your industry. If they are asking questions that have obvious answers, they may not be the right fit. Medical offices have specific electrical and mechanical needs that must be addressed up front or they could be very costly.
- Professionals in your industry can't vouch for their experience. References can be extremely telling. Building a medical practice is a collaborative process between your lender, lawyer, contractor, equipment specialist and real estate agent. If your agent is not in sync with those professionals it can turn your project into a nightmare.
- The agent has listings in your desired market. If the agent has listings in your market, they have a conflict of interest in representing you as a tenant or buyer and should be eliminated as an option. That agent will have a financial incentive to push you toward their listings. They also have existing relationships with landlords in your market. If negotiations get tough, where will your agent place their loyalty? There is just too much at stake to do business with someone who is conflicted. You could miss the ideal property because it is listed with your agent’s biggest competitor.
Just as medical professionals specialize, so do real estate agents. You wouldn't refer a patient who needs dermatology work to a cardiologist. The real estate agent who handles your transaction can impact the trajectory of your business for decades. Put yourself in the hands of a professional agent who specializes in your type of medical practice and represents your interests alone. It will ensure that you get the very best outcome possible.
CARR is the nation’s leading provider of commercial real estate services for healthcare tenants and buyers. Nitra cardmembers get a free lease evaluation. Visit CARR.US to learn more.