Dr. Bradley G. had been running a successful dental practice in Edmonton Alberta when he decided it was time to expand. The doctor was pleased when his landlord indicated a willingness to offer him additional space. 

The Problem

Dr. G. was concerned with getting a fair deal, with respect to the new dental office lease agreement. Securing a good lease was a critical component in his overall decision to proceed with the expansion plan. Would there be a fixturing period?  Would his practice face any down time; if so, how long would his doors be closed? Would the terms in the lease agreement for the additional space be fair, affordable and flexible?

The Challenge

The doctor soon realized he wasn’t comfortable making such a significant decision without some form of professional advice. Following the recommendation of his dental supply partner, he contacted the dental office lease negotiation specialists at Cirrus Consulting Group for a complimentary consultation.

Cirrus met with the doctor to evaluate his lease, current situation and long-term career objectives. After weighing his options, the doctor decided to move forward with the practice expansion, armed with Cirrus Consulting Group to negotiate the terms in the offer to lease, and subsequent lease agreement. They were looking for the following positive results from the negotiation:

  • Ability to sublease the additional space to another healthcare provider
  • Affordable rental rates and fair terms in the new space
  • Long term security and flexibility for a smooth practice sale
  • Minimized personal risk and protection
  • Exclusivity to practice dentistry in the building

The Solution

Dr. G. and Cirrus worked together to create a strategic and tactical plan to effectively negotiate the expansion and new lease terms, achieving the following substantial “wins”:

  • Expansion into the neighboring office space, obtaining an additional 1870 sq. ft. of real estate.
  • Doctor will not pay base rent for the first six months in the new space, a savings of $17,765.
  • Secured a 10 year lease term with 2 x 5-year “options to extend”.
  • Doctor now has the flexibility to bring in associates, with the option to rent out 1000 sq. ft. of the additional space to another healthcare professional.
  • Modifications to the “Assignment” clause, removing the landlord’s right to terminate the lease upon request to sell the practice. The doctor is now released from all financial responsibilities in the event of practice sale.
  • “Exclusivity” provision added to prevent the landlord from leasing any other space in the building to a dental or oral health professional.
  • Insertion of “Death and Disability” clause, terminating the lease if the doctor is unable to work, saving Dr. G. and his family (or estate) from incurring $100,000’s in rental obligations.
  • Transferred the name on the lease from Dr. G. to a holding company; the doctor will be fully released as the personal guarantor upon lease expiry, exempt from all financial responsibilities.
  • Adjustment of the “Relocation Clause”; landlord must provide a minimum of 120 days’ notice in the event of relocation. Tenant will not be required to move out until the new location is fully built.
  • Removal of the “surrender” provision; upon practice exit, the doctor is released from returning the space to its original shell, a savings of over $200,000 in potential reconstruction costs. 

“Their advice and expertise allowed us to negotiate a fair agreement with our landlord. In addition, their services saved us countless hours in negotiations. The terms of the lease are much more favorable than our previous one. Our experience with Cirrus was so positive I would have no problem recommending them to anyone in the future.” 

– Dr. Bradley G., DDS, Edmonton Alberta

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

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