A lease negotiation is the time for Doctors to address the terms in the lease which cause concern — don't waste it!

Overview

The first LIFT buildings now are approaching 15 years old and unexpired lease lengths are shortening, so the value of these assets are becoming a concern for the institutional funds.

From an investors perspective, the value of their building is often determined by the value of the lease which covers three important points.

  • The covenant
  • The level of rent
  • The length of the lease

From a doctors perspective the covenant they offer is generally excellent and the level of rent will be good, which often propels the length of the lease into high importance for investors.

Once the length of unexpired term of the lease runs below 10 years, the investors value starts to diminish and this is where there is an opportunity for GP’s to renegotiate the terms of the lease, not only benefiting themselves, but also their landlords.

We have been involved in negotiations for a number of practices looking at leveraging their position to negotiate improved lease terms.

For further advice in this area to see if there are opportunities to improve your position please contact one of the team.

Healthcare