Dental Real Estate Agents: Why You Need One and What to Look for
Commercial real estate agents are paid thousands, and sometimes tens of thousands, of dollars when their client agrees to buy or lease a property. Even better for them, their cut is a percentage of the cost. If they can talk you into a more expensive space, they profit more. So why not just find properties yourself and cut that expense out?
Not so fast. A knowledgeable commercial real estate agent can save YOU hundreds of thousands(!) of dollars over the life of a lease. What would you do with that money? Put it back into your marketing campaign? Pay yourself a little more? Maybe a combination of both. Here are the benefits of working with one and how you should choose who to represent you.
Why you Need A Professional
Let’s start with why you shouldn’t cut corners and try to find real estate yourself. Real estate agents have far more experience in this step of the process and have access to tools that you don’t. Finding someone who is knowledgeable and who you trust is key. We recommend interviewing a few different firms before deciding on one.
We asked our friend, Ken Jorgenson of Carr Realty, about the danger of the ‘DIY’ approach. Here’s what he had to say:
What is most important is not taking a “Do-It-Yourself” approach to your commercial real estate. Hiring a professional (who comes at no charge to you) will save you 10-20 hours+ of research, touring, negotiating, etc…
They will help position you to save tens-to-hundreds of thousands of dollars through creating the perfect posture in the negotiation. And they give you confidence throughout the process that you’ve seen the market, you know your options and you are achieving the most favorable terms possible.”
The Same Commission is Paid Whether You Have Representation or Not
Whether or not you choose to hire someone to represent you, the landlord pays the same commission. Except if you’ve chosen to not hire representation, that entire check goes to the landlord’s agent. Had you hired help, your agent would be getting half to look out for your interests. Given that the percentage is fixed, wouldn’t you rather have a professional on your side, too?
Market Intel: Comps & CoStar
What does the local market for commercial real estate look like? What did your neighbor pay for a similar space? What else is available that hasn’t been listed on Loopnet or that you just haven’t happened to drive by? Commercial real estate agents have access, through a paid subscription to a program called CoStar, to properties that you may not ever be able to find on your own. These could be spaces that have yet to begin construction, that may not have a sign yet or simply one you haven’t driven by or didn’t notice a sign for. Further, CoStar is so dominant in their industry that they can provide accurate market intel. If you don’t know what spaces similar to yours cost in your market, how can you even begin to negotiate toward a fair price?
Why That Professional Should be Dental or Medical Specific
Communicating the Benefits of a Dental Tenant
You may have a friend or family member with a little bit of experience in real estate. But, unless they fit the criteria below, working with them could be a huge mistake.
Dental practices are among the safest bets that a landlord can make. Compared to other business models, they’re less likely to default on their loan and stop making payments. Landlords, of course, like long term tenants and are generally willing to make more concessions for them. Would you rather have a 95% chance at getting paid $9 or a 70% chance of being paid $10? The math says you take the first option.
In addition to being more reliable, dental practices bring desirable clientele to the entire development. That creates better odds for the landlord’s other tenants. Patients are inherently people who are willing to spend to take care of themselves. Their attention is valuable to other businesses and, thus, the owner of the property.
Dental & Medical-specific Expertise
Not everything when it comes to real estate is about price. For example, how much space does a five chair operatory typically need? How should that space be divided? What are the minimum requirements for an individual operatory and for a waiting area? If your real estate agent doesn’t know the answers to these questions, imagine how much time and effort you could waste looking at spaces that would never work. Or worse, you commit a space before realizing there is an issue. Specialized dental and medical agents have extensive experience working with clients just like you and can quickly eliminate properties that don’t meet the right criteria.
The Other Model - Lease Consultants - to be continued...
If you do insist on finding the space yourself but still recognize the value of a professional for assistance, you can hire a Lease Consultant on your behalf. Typically, Lease Consultants will charge a set fee or a portion of what they save you when negotiating the lease. We’ll cover the role and benefits of hiring a Lease Consultant in our next blog article. Stay tuned!
Contact Carr Healthcare Realty
Interested in speaking to a dental-specific real estate agent about your location search? We recommend the dental team at Carr Real Estate. We mentioned our friend, Ken Jorgenson, earlier in the blog. You can contact him directly at [email protected]