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Leasing Medical Office Space

As the medical office market continues to provide healthy outcomes for commercial real estate investors, an increasing number of healthcare providers are on the lookout for properties - and leases - that fit their needs. While the demand for convenient, accessible locations and longer lease terms may seem generally applicable to commercial real estate transactions, there are nuances to the medical office market that providers should consider.

The first step in any medical office search is retaining an experienced broker who has negotiated medical office space in the past. These professionals will be aware of the unique needs of a medical office and be able to match those needs to available buildings, all while structuring the appropriate terms and covenants of the lease agreements.

These key considerations are among the many issues that should be addressed in medical office leasing:

Use of Space

Healthcare providers often use hazardous materials and generate biomedical waste as a regular part of their practice. This includes the use of X-ray machines, CT scans and other equipment which could generate harmful radiation. Such requirements should be accounted for in the lease document to ensure compliance.

After-Hours Use

Because a medical practice often operates outside of standard business hours, a broker should pay special attention to the allowance for after-hours building access, as well as the method used to account for utilities during this time.

ADA Compliance

Because facilities that house healthcare providers are more likely to receive scrutiny, medical tenants should pay special attention to the Americans with Disabilities Act clause contained in the lease document.

Landlord Access

Usually, a commercial lease allows the landlord to enter the space to show the premises to future tenants, inspect for lease compliance and make infrastructure repairs. However, in accordance with the Health Insurance Portability and Privacy Act, a healthcare provider must limit the landlord’s access to exam rooms and areas where patient records may be kept

Exclusivity

An exclusive use provision ensures that the landlord will not lease any other space in a certain development to a business or party that would be in direct competition with the tenant’s use of its space. It is in a healthcare provider’s best interest to ensure exclusivity for his or her specific practice.

Additional concerns, such as tenant improvements or a death and disability clause, should also be addressed before medical space is leased.

Utilizing a knowledgeable commercial real estate professional like those at Intelica can ensure proper location selection and a well-structured transaction that fits the unique needs of the healthcare provider. If you’re in the market for medical office space, contact our team today. 

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