PSA: Handling Real Estate “In House” Costs You More. (Yes, Really.)

Why Going Solo in Healthcare Real Estate Will Cost You More Than Hiring a Tenant Representative

For healthcare providers, real estate is one of the largest expenses, second only to payroll. When it comes time to lease, renew, or expand your space, it might sound tempting to handle it “in house” without engaging a Tenant Rep Broker. After all, how hard could it be? However, the reality is that navigating commercial real estate landscapes without expert guidance often results in costly mistakes, wasted time, missed opportunities, and unfavorable lease terms.

Here’s why trying to manage your own healthcare real estate negotiations will likely cost you more in the long run than hiring a tenant representative to do the heavy lifting for you.

1. Lack of Market Knowledge Means Overpaying

Tenant rep brokers specialize in understanding commercial real estate markets.

It’s all we do, all day long.

We have access to real-time data on rental rates, market trends, landlord concessions, and comparable healthcare leases. We have deep relationships in the market and know about space before it comes on the market. We know that your Landlord is going to put the building on the market for sale next year, so you need to beef up you SNDA when you renew this year. We know how to build leverage and press it to your advantage.

Without this information, and more like like it, healthcare tenants are at a disadvantage and often end up paying above-market rent (without even knowing it) or missing out on valuable incentives such as free rent or tenant improvement allowances. Guess what…that all adds up.

2. The LoopNet Argument

“I found a bunch of space on LoopNet, I know what the market looks like.”

This comes up a lot, so we made a separate section just for it.

Think about this: how many times has a patient come to you after spending a few minutes on WebMD and is therefore certain that they have _____ disease and require ______ treatment? How many times have you had to explain that your thousands of hours of training and experience more than likely trump their Google search?

This is our version of that.

LoopNet

The WebMD of Commercial Real Estate

Yes, there’s some limited information on Loopnet. It’s just that…limited information (and typically inaccurate and outdated at that.) Compare that to the experience tenant rep brokers have built negotiating hundreds of transactions in dozens of markets over decades.

Our value is not just in knowing the market, it’s knowing how to leverage it, uncover all opportunities, make Landlords compete for your business, skillfully negotiate contracts, achieve the lowest possible rental rate, maximize concessions, establish and manage your timeline, preserve goodwill between you and the Landlord and level the playing field so you don’t get taken advantage of by professional building owners simply because commercial real estate is not your primary business.

Ok…enough about that.

3. Landlords Have Experts—You Should Too

Landlords and property owners do this for living. They do it all day, every day. They hire experienced leasing agents who are skilled negotiators and work solely to protect the landlord’s interests.

Yes, they want you in the building. No, they are not on your side.

When healthcare tenants negotiate on their own, they face professionals who know every tactic to maximize the landlord’s profits. A tenant rep broker levels the playing field, and is aligned exclusively with you, ensuring you get the best terms possible for your lease.

Think about this: You will never find a Fortune 500 company enter into a real estate lease without a Tenant Rep. We’ve worked with them, we know. Why, though? Many of them have an entire Real Estate department in-house.

Here’s why: Because it SAVES THEM MONEY. And explaining to shareholders that you took a bath on a lease renewal because you didn’t bring in an expert is probably not a whole bunch of fun.

4. Time Is Money

Handling site selection, market analysis, lease negotiations, and real estate due diligence is time-consuming…and you have a lot of other things to do. Physicians, administrators, and healthcare executives already have demanding responsibilities, and taking on a real estate transaction without expert guidance can lead to countless hours of lost time. A typical transaction can take you away from your business for dozens of hours. A healthcare tenant rep broker streamlines the process, allowing you to focus your business, patient care, back office, etc. while they handle the details.

5. Negotiating Without Expertise Can Lead to Hidden Costs

Commercial lease agreements are full of intricate details, from operating expense pass-throughs to events of default, critical dates, penalties, ADA regulations and more. Without a broker, tenants may easily gloss over critical clauses that can lead to unexpected expenses down the road.

Add to it this: Landlords have their attorneys draft the lease you will ultimately sign. A first draft lease is NEVER going to be more favorable for the recipient that for the party drafting it. A detailed LOI and several rounds of lease redlines can make all the difference, and a tenant rep broker knows how to ensure that all lease terms align with your business interests and financial best practices, helping to avoid costly pitfalls.

6. Brokers Have More Leverage to Secure Better Deals

Tenant rep brokers have long-standing relationships with landlords and access to off-market opportunities. We understand the unique needs of medical tenants, such as above-standard infrastructure, patient access requirements, and build-out costs for medical equipment. We also have a cThis expertise allows us to negotiate more favorable lease terms, lower rental rates, and additional incentives that healthcare tenants might not secure on their own.

7. Hiring a Tenant Rep Broker Is Free for Healthcare Tenants

Many healthcare tenants believe hiring a broker adds an unnecessary cost and makes their rental rate inflated.

Sorry to break it to you, but it doesn’t work that way.

The landlord pays the broker’s commission. That commission is already in their pro-forma for the building and baked into the rental rate. They know their “best-and-final” terms that they will agree to, anything above that is gravy.

If you do it solo, the Landlords broker takes the entire commission, but if you hire a tenant rep, we split that amount with them. No wonder they don’t want you to engage your own broker…not only will they get a better deal for their client, they make more money too!

Bottom line: Hiring a tenant rep means you receive expert representation at no direct cost. Without a broker, tenants miss out on valuable negotiation power while still paying a rental rate that includes full brokerage commissions.

Bottom Line: We’re Trained to Do This Professionally.

Let’s land it here. We are experts in healthcare real estate, and we only work with tenants. We’re specialized, like you.

Think of it this way…an ENT doesn’t operate on elbows and knees. They’re not trained to do it! And we have yet to meet the patient who decides to take a crack at a DIY root canal. They just know it’s unwise.

Tenant representation brokers are trained to bring market knowledge, negotiation skills, experience and insider knowledge that ultimately lead to better deals, saving you time, money, and stress.

If you're considering a new lease, renewal, or expansion for your healthcare facility, working with a tenant rep broker is the smartest financial decision you can make.