Dr. Kristen Donohue is a successful General Dentist running a practice out of Burke, Virginia. She had been practicing for many years and was approaching the renewal date of her dental office lease when she was invited to attend a dental lease negotiation seminar in Virginia hosted by Cirrus Consulting Group.

The Problem

It was at the seminar that Dr. Donohue learned how landlords use their standard office lease agreements as a tool to make maximize rent from their tenants. She came to understand that her lease contained numerous clauses that would make it difficult to sell her dental practice, provide the landlord with personal guarantees after assignment, or force her to pay hundreds of thousands of dollars to restore her office back to its original shell upon expiration of the lease agreement.

The Challenge

The doctor sought out the expertise of Cirrus Consulting Group, the dental office lease negotiation experts, looking for the following key “wins” in her renewal negotiation:

  • The best deal possible, with fair and affordable rental rates
  • The flexibility to introduce associates to the practice and to allow for a seamless  transition out of practice at the appropriate time
  • Practice stability and security
  • Minimized personal risk and liability

The Solution

Cirrus met with the doctor and together they developed a lease negotiation strategy based on her career goals and practice needs. They achieved the following positive results from the negotiation:

  • A significant reduction in rent from $39/sq. ft. to $30/sq. ft., resulting in a savings of $209,000 over the life of her lease.
  • Secured a 10 year lease term with 2 x 5 year “options to renew”, now exercisable by a purchaser of the practice.
  • Modification of the “assignment clause” to remove the landlord’s right to collect any proceeds of the practice sale. The doctor is also now released from all financial responsibilities and obligations upon the effective date of a practice assignment.
  • The doctor gained the option to bring in associates without requiring permission from the landlord.
  • Insertion of “right of first refusal” language, giving the doctor the option to buy the building should the landlord elect to sell, and the right to purchase the premises should the landlord decide to convert the building into a business condo.
  • Limited personal exposure by gaining the right to transfer the lease from the doctor’s name to a corporation as a tenant, reducing personal risk.
  • Limited personal guarantee; the doctor is personally liable throughout the 10 year lease term, however, after the term the landlord can only request a maximum of one years’ rent. 
  • Removal of the “surrender” provision releasing the doctor from having to return the space back to its original condition upon practice exit, a potential savings of $350,000 in demolition and reconstruction costs.
  • Insertion of a “death and disability” clause that will save the doctor and her family or estate from enduring hundreds of thousands of dollars in rental obligations in the event of an emergency.

“I cannot say enough how pleased I am with the result of Cirrus’ hard work, and how smoothly everything went. Their careful research of the market value of leased properties in my immediate area allowed them to negotiate nearly a 25% drop in my monthly rent. The cost of their service will be recouped in just the first 3 months of my new lease agreement! I would whole-heartedly recommend Cirrus Consulting Group.”

– Dr. Kristen Donohue, DMS

For 20 years, the Cirrus Team of expert dental office lease negotiators have been committed to getting doctors fair and affordable financial terms in their leases. We are devoted to ensuring your practice is setup for long-term stability and flexibility, security and success, with the ability to sell and transition out of your practice.

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Dr. Brown and His Office Lease Renewal