The Leasing Process - What To Expect At Every Step. » NorthWest Healthcare Properties

The Leasing Process – What to expect at every step.

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For healthcare professionals, each step of the leasing process can have its challenges that must be fully considered. Read more to understand what to expect and how to be successful.

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Now that you’ve begun to think about the range of considerations that will factor into this decision, let’s dig in a little deeper and look at all the steps involved in the leasing process. With over 15 years’ experience working with healthcare professionals across Canada, NorthWest has an expert understanding of the typical process involved in leasing medical office space. This overview will guide you through each step so that you can pursue the process methodically, ensuring your experience is as smooth and seamless as possible.

Step 1 - Put Together Your Business Plan

It is critical to begin the process by putting together a thorough business plan, including a list of goals and objectives for your new business location. Some elements to consider:

  • What is your desired opening date at your new location?
  • Do you plan to buy or lease your office space?
  • Are you building-out your office from a raw space, or will you renovate an existing office?
  • Do you have plans for future growth that would impact the amount of space you require today?
  • What is your budget for the new office?

Step 2 - Select a Suitable Location

Finding the right location is crucial for the long-term success of your practice. There are a number of factors to carefully consider in your search:

Professional Factors

  • Does your practice fill a need in the community?
  • Is there demand for your specialty or sub-specialty?
  • What is your desired opening date at your new location?
  • Do you plan to buy or lease your office space?
  • Are you building-out your office from a raw space, or will you renovate an existing office?
  • Do you have plans for future growth that would impact the amount of space you require today?What is your budget for the new office?
  • Are the community demographics in line with your target patient base? Is the community experience a growth or decline in population that would impact the demand for your services?
  • What availability or access do you require in terms of hospital privileges, diagnostic facilities, and support services?
  • Is the economic situation in the community conducive to the success of a new business?
  • Are there government sponsored incentives to open your business in the community?

Personal Factors:

  • What is the cost of living in the community (housing, groceries, childcare, etc.)? Is it favourable for your desired standard of living?
  • Does the community provide adequate career opportunities for other family members in your household?
  • Does the community offer the transportation services you require, such as public transportation, Uber, etc.?
  • Do the education facilities in the community meet your family’s needs?
  • Will the community facilitate the kind of social life you enjoy? Does it have satisfactory shopping/retail services? Does it meet your needs in terms of recreational and cultural programs and services?

Neighbourhood:

  • Is the office/building located in a high or low visibility area? Is high visibility important to the success of your business?
  • Is the location convenient and easily accessible for patients? Can it be accessed by public transit? Is it located in an existing community ‘hub’?
  • What is the travel time to and from home, hospital(s), or other offices?

Building:

  • What is the cost of basic rent per square foot?
  • What is the cost of your desired leasehold improvements?
  • What is the cost of the additional rent (i.e. CAM or TMI)?
  • Can the building accommodate any special equipment requirements your business has?
  • What parking systems are in place? Is the availability and condition of the parking facilities acceptable?

Space:

  • How much usable space is required to effectively run your business?
  • Is there expansion potential if you require more space in the future?
  • Does the size of the space allow room for potential partners or other services?

Step 3 – Prepare a Preliminary Office Design

Once you have identified the building and premises where you’d like to open practice, you will work with a space designer to begin planning the design of your new office space. The designer will work with you to understand what your needs are – for example, how many exam rooms you’ll need, whether or not you need a washroom inside your space, what look and feel you want your space to have, etc. The preliminary space plan will not only give you an idea of what your premises will look like, it will also help determine the financial terms of your lease and the timeline for when you can open your business. We’ll look at this process in closer detail in the next section, Setting Up Your Medical or Clinical Office.

Step 4 – Review Offer to Lease or Letter of Intent

After you have approved a preliminary space plan, the landlord will typically present you with an Offer to Lease (OTL) or a Letter of Intent (LOI). The key provisions of your lease will be covered in these documents, which may include the length of lease term, rental rates, required deposits, commencement date, tenant improvement allowances, and various other options.

Step 5 – Review the Full Lease

Now that you’ve agreed upon the initial terms of the lease presented in the OTL and the space plan has been approved by both parties, the next step is to review the details of the actual lease. Lease documents are often lengthy and contain a number of important details that will govern both your and the landlord’s obligations during your lease term. It is critical that you take the time to carefully review the lease, and strongly recommended that you engage a lawyer and/or any other business advisors to assist you in the review process so that you can feel comfortable that you fully understand all clauses and provisions in the lease.

Step 6 – Finalize the Office Design and Begin Construction

With a signed lease and a finalized office design in place, all that is left to do is obtain permits (if required) and begin constructing the space. Depending on the scope and complexity of the project, construction typically takes between one and three months to complete.

Step 7 – Open for Business

Congratulations! You’ve made it to the finish line. The construction is complete, you’ve been handed the keys, and it’s time to open your doors and welcome your patients to your new office.

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