There are many factors to consider when selecting the right location for your new practice

If you’re not properly prepared to relocate your dental practice, the decisions you make today can negatively impact your practice tomorrow. We hope you use this guide as a tool to help ensure a smooth and safe dental practice relocation.

Step 1: Defining Your Goals & Creating a Relocation Plan

Create a relocation plan by detailing the necessary steps in the process, and outlining your goals and objectives for the new space:

  • Do you want to increase your work/life flexibility?
  • Are you looking to reduce costs and increase production?
  • Would you like to enhance your ability to attract new associates, or grow your patient-base?

Dental officeStrategically thinking about what you want the new space to do for you is a key component in selecting the right dental practice location. Do you need a larger space? Are you looking for additional treatment rooms? Do you want to lower your rent costs? What does your current facility lack that your new space will need? What are some of the key patient requirements for the new location?

Step 2: Analyze the Terms in Your Current Dental Office Lease

Now that you’ve outlined your relocation plans and objectives, it’s time to focus on your current dental office lease. When initially starting a dental practice, many doctors make the mistake of signing the office lease without reviewing it first for hidden terms and clauses. This common dental leasing mistake ends up costing them a fortune when it finally comes time to transition or relocate.

It’s important to review the terms in your lease agreement before approaching your landlord. This will ensure that there are no surprises upon the request for a relocation, and you know you’ll be fully protected.

Important Considerations in Your Dental Lease:

  • Assignment Clause: Is there an “assignment” clause in the lease that grants the landlord permission to deny your relocation request? Do they have the right to terminate your lease upon this request, and kick you out of the building? Can they charge you a penalty fee? Over 50% of leases today include some type of landlord “recapture or termination” right on assignment.
  • Surrender Clause: Is there “surrender” language in the lease that will force you to restore your current office back to its original configuration upon practice exit, removing all improvements like plumbing, cabinetry, walls, flooring, etc.? This endeavor can easily cost hundreds of thousands of dollars in demolition and construction fees.
  • Business Downtime: How much time do you have left in your current space? It’s important to ensure you can avoid or minimize any business “downtime” or “dark-time” while your new practice is being built.
  • Financial Responsibility: Does your lease state that you remain financially liable for the new tenant’s rent in the event of a non-payment, after the transfer of ownership?
  • Vacating the Premises: Does your lease contain provisions that dictate the manner and timing in which you must vacate the premises? Ex. Are you required to give a certain amount of notice to your landlord prior to vacating? Is there an auto-renewal date set up in the lease that requires you to accept or decline this option by a certain date?

Step 3: Identify Available Dental Practice Locations

Once you’ve ensured the details in your current office lease will not impede your relocation plans, it’s time to look for a new location. Choosing the right location is crucial for the success of any dental practice, with a number of factors to consider in your search.

  • Accessibility & Visibility: How accessible will your office be to public transportation? Is parking readily available for patients? How important is a high-visibility location to you? Is your ideal location a store front, in a mall, or in a medical building?
  • Demographics & Neighbors: Conduct some research on the demographic makeup and population of the neighborhood you are considering; the demographic you choose should match your target market. Your clinic will also benefit by being located near businesses like a doctor’s office, grocery store, or pharmacy that bring in foot traffic.
  • Competition: Are there any competing dental offices in close proximity to the location you are considering? What type of dentistry do they practice?

Step 4: Review & Negotiate the Economics & Terms of the New Location 

Upon identifying a potential new location, you will be presented with an “offer to lease” (or Letter of Intent) by the new prospective landlord.  This is the short form of the dental office lease that mainly addresses economic terms such as rental rates, start date, length of term, “options to renew”, etc.

The rental rates and terms in the offer should align with the needs of your practice and personal goals. Research and a solid dental lease negotiation strategy are critical here, as this document will outline your responsibilities to the landlord as a tenant, and determine your rental obligations over the next 10 years or more.

At this point it’s recommended to bring in a professional dental office lease negotiator to help review the offer to lease to identify any hidden traps or risks.

 Step 5: Notice of Lease Termination to Current Landlord

Should the language in your current lease require you to give advanced written notice of your departure plans to your landlord, now is the time to formally draft a “Notice of Term” document, which should outline your plans and exit date.

Being aware of the clauses and risky language in your lease before you relocate is the first step to protecting your investment.

Cirrus Consulting Group specializes in getting dental professionals favorable terms and rental rates in their office leases. We review the lease for risks and problem areas, and develop a customized negotiation strategy to help our clients secure a lease that provides the flexibility for a smooth practice transition, with protection, and security.Your lease is one of the most important agreements you will ever sign in your career as a dentist, so educate yourself, and properly prepare for your relocation.

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Questions about relocating your dental practice or your dental office lease? Sign up for your personalized dental office lease consultation with a Cirrus expert!