Dental office site selection involves many criteria outside the realm of normal office or retail space searches. Issues such as capacity for increased electrical power necessary for a dental office, desirable proximity to targeted potential patient traffic, and added security are all issues unique to finding an appropriate location for a dental office. Below are the top ten issues which we view are paramount for every dentist to take into consideration when searching for the site of their new practice.
1. Rental Costs – When comparing rental costs between locations, do not just look at the stated rental rates, but also include each location’s required reimbursable/surcharge expenses for utilities, taxes, insurance, common area maintenance (known as “CAM”), and possibly other location-specific expenses.
2. Construction Build-out Costs – Look at the cost to renovate potential spaces and get them up to proper prevailing code standards for a dental office occupancy. More often than not, a location’s electrical, plumbing, and mechanical systems also will have to be upgraded to allow for the increased power, water, and HVAC requirements needed by modern dental practices.
3. Surrounding Market Potential – What are the market conditions around the property? Evaluate each likely location’s dental demographics, age and growth potential, surrounding amenities, transportation access, transit, crime statistics, future development projects planned or underway (especially new housing), etc. A thorough side-by-side dental demographics study can be instrumental in identifying viable locations.
4. Utility Services – Ensure that the site has all necessary utility services available to the property, especially important with proper electrical power and data/telco services. The latter is something that is often overlooked when examining site locations, but will become very evident later on if high speed internet is not available to the final chosen location (don’t be surprised, even in this modern age we’ve seen this happen before!).
5. Proximity to “Anchors” and Visibility from Them – For a dental office, you want to pick a location near “traffic”—specifically of the patient population type you will be trying to attract to your new practice. Again our Dental Demographic Studies can be very instrumental here. Often this means being in a retail shopping center near a grocery store, pharmacy’s, nail/beauty spaces, restaurants and other well frequented “big box” retailer often called “anchor tenants”. Looking for locations on major intersections is also a strategy, as it maximizes visibility from the most possible potential patients.
6. Current and Long-term Landlord Viability – Check out the landlord’s ability to pay Tenant Improvement (TI) dollars, as well as their long-term financial capacity to maintain the property up to the standards desired. In today’s tough economic times, some landlords are so cash strapped they cannot follow-through on promises made during lease negotiations. Be very sure that all assurances are included in the final lease, in writing. The spoke word leaves on the wind, the written word remains forever.
7. Roof Condition – Always examine or get a professional to inspect the age, type, and present condition of roofs, and be on the lookout inside a space for any roof leaks or water stains present on ceiling tiles or walls. Most commercial leases leave the responsibility for the roof maintenance, repair and replacement to the Landlord. Be aware however, that a roof replacement will likely be included in a the following years Triple Net Charges to cover the costs.
8. Parking – Will there be enough employee as well as patient parking? Also are there handicapped parking spaces near a location’s front entrance, and are there adequate handicapped ramps over the curb in order to allow someone in a wheelchair to access the front door of a potential new office space? Some Landlords will attempt to make this the responsibility of the Tenant, don’t fall for that. Tenant responsibility for ADA accessibility is from the entrances into the space only.
9. Occupancy – Make sure that you, your broker or owners representative has done the research to confirm with the zoning and building departments that the type of use (Typically B type Occupancy) is in that particular location. Most Landlords will make this the responsibility of the Tenant. Keep in mind that there are leases out there that are NOT cancelable because the occupancy is not allowed. Do your due diligence. Typically a call to the city/municipality is all it takes, but it’s a very important call to make.
10. Other Practice Criteria – Depending on the type of practice you will be opening, you may want to be near a hospital, or other dentists for referrals.; try to avoid centers that have “sin use tenants” such as liquor stores, adult book stores, or the like; and if you are a pedo practice, you may want to consider being near or on the way to a grade school, day care, pre-k or other youth oriented businesses like, dance studios, karate clubs, trampoline parks and the like.
These are just a few of the many considerations that you should take into account when determining where to locate your new practice. Overall, your Broker can help you find the physical attributes you’re looking for in a space. But you want to make sure that the existing conditions of that space are acceptable to your type of practice. If they aren’t you should find out what kind of costs you are looking at to get it where you need it.
Doing your research and due diligence upfront, can save you years of frustration down the road. Be sure to engage an attorney to review your lease BEFORE you sign it. And as mind numbing as it may sound, read the lease yourself. Every single time it is modified, from start to finish. Mistakes happen, best to catch them before executing. You might be surprised at what you find. Once it’s signed you’re bound to live by the terms for however long your lease is. Think of it as a prenuptial agreement. After all, you’re going to be married to your Landlord for a very long time