Dr. Arvin Mehta of Vacaville, California was ready to jump into the new role as an owner dentist by purchasing his first dental practice. He was determined to personally take care of every step involved in setting up his practice, including securing the offer to lease and dental lease agreement.

“I had originally been hesitant to sign up with Cirrus thinking I could do everything myself.”

 Dr. Arvin Mehta

The Problem

After being presented with the office lease agreement and reviewing it, the doctor soon realized that he did not have the time or expertise necessary to work through the tedious details within it, and bear the lease negotiation process alone. There was worry he could potentially be inheriting a bad lease with hidden language and clauses that could cost him hundreds of thousands of dollars in problems, jeopardizing his long-term investment; this was not a risk he was willing to take.

The Challenge

Dental offices are expensive, difficult-to-relocate businesses, therefore it’s the dental office lease that acts as tool to protect a doctor and their practice. Dr. Mehta was looking for the following achievements in his dental office lease negotiation:

  • A good deal with fair and affordable rental rates
  • Long-term practice protection and security
  • Minimized personal risk and liability
  • Flexibility to bring in associates and ensure a smooth sale and transition out of practice
  • Exclusivity to practice General Dentistry in the building

The Solution

Dr. Mehta sought out the expertise of the dental office lease negotiators at Cirrus Consulting Group to have his lease professionally analyzed and negotiated before the practice purchase. Cirrus took the doctor through their strategic seven-step lease negotiation process, first by assessing and understanding his practice needs and career goals, and then by reviewing the offer to lease, and subsequent lease agreement.

Cirrus worked with the doctor to create a solid lease negotiation strategy, resulting in the following key “wins”:

  • They secured a 10 year lease term with 2 x 5-year options to extend, with further options now transferable to a future buyer.
  • Achieved fair dental rental rates at $3,654/month for years 1-3 with a 3% annual increase in years 4-10.
  • Added an “exclusivity” provision to prevent the landlord from leasing any other space in the building to a General Dentist.
  • Insertion of a “death and disability” clause that will save Dr. Mehta and his family (or estate) from incurring hundreds of thousands of dollars in rental obligations.
  • Significantly reduced personal risk by adjusting the assignment clause, releasing the doctor from all financial responsibilities and obligations,one year following an assignment.
  • Gained the ability to bring in associates without requiring permission from the landlord.
  • Addition of “first right of refusal and first right of purchase” language obligating the landlord to offer any available space on the premises to Dr. Mehta first, before it goes on the market.
  • Addition of “audit rights and exclusions” when presented with operating expenses from the landlord.

“Cirrus has modified, tweaked, and finalized a great new lease for me as I jump into the new role as an owner dentist. In the end, the work that Cirrus was able to complete will pay for itself in a relatively short amount of time, and more importantly, proved to be well beyond my capabilities. I would highly recommend the Cirrus team to anyone needing help with their lease.”

– Dr. Arvin Mehta

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