Dental Office Lease Negotiation: What you need to know before starting

Dental Office Lease NegotiationIf you’ve narrowed down your choices for the location of your dream dental office, dental office lease negotiation is the most important next step of your startup journey.

You may be wondering what is the rent? What are my lease terms? How long is my lease for? If you haven’t thought about it, now is the time because dental office lease negotiation is the most important aspect of starting out on your own when looking for a location.

Do not start negotiating or put any counteroffer until you know exactly what you’re getting for the listed rent. Continue reading to find out the list of questions you need to ask the agent/landlord or property representative prior to beginning your negotiations.

If you’re like me and have never gone through the process of negotiating a commercial lease before, it can be very daunting to even start to think about all this.

First of all, I was not aware of all the legal terminology that is used in a commercial lease document. Doing a search for “commercial lease negotiation” in Google will give you an overall idea of what to expect in a lease document, but negotiating the terms in your favor requires a little effort and good understanding of what’s actually being offered on the table.

Hiring an expert for your Dental Office Lease Negotiation:

Signing a long term lease for an office space is a big commitment. I was scared because I had no idea what to watch out for. Up until now, I had seen contracts as an associate, but this was going to be for my own business for a very long term.

I knew I had to hire a professional for my dental office lease negotiation. After looking around on dentaltown, George Vaill’s name came up first in every discussion on the topic of lease negotiations. I gave him a call and explained to him that I had narrowed down my choice for an office location.  After the initial consultation, I was ready to work with him and signed on to have him negotiate the office lease.

I was advised to not begin any negotiations until I knew what I was getting at the initial listed rent. George negotiated back and forth on my behalf to the landlord’s attorney. Having been through the whole process now, the savings over the entire lease term is well worth my initial investment of working with him.

Now two years into my startup, I decided to consult with George Vaill once again for his expert opinion. I asked him of the top three important things doctors need to consider when they reach the phase of lease negotiations. This is his response:

Assuming that the location has been thoroughly vetted to assure that it meets the location, site and space criteria, here are three very important considerations:

1.   Although it may sound self-serving, I think they have to carefully choose the person who will be negotiating on their behalf. It’s not so much a matter whether or not they can find someone with the proper skill set. Rather, it’s a matter of whether they select someone who will pay allegiance to them as opposed to paying allegiance to the landlord who might otherwise be paying them.  The difference between rental terms secured on their behalf by a negotiator whom they pay and a negotiator whom the landlord pays can be significant.  What it comes down to is this:  Is that negotiator working in their interest or in the landlord’s interest?

2.   They have to generate some business projections in order to establish a starting rental range that will be affordable within their projected budget.

3.   They have to decide what their risk tolerance is; i.e., are they so wedded to this location that they will accept whatever terms the landlord tries to force down their throat? Or, contrarily, do they have the courage to walk away if the terms are not acceptable and the patience to keep trying until they come up with the right location upon terms that fit their long-term business plan?

George can be contacted by going to his website located at

If you’re interested in a location and thinking of moving forward with lease negotiations, you need to know what you’re getting for your money – what is the landlord offering at the initial listed rent.

When looking at a space, make sure to find out the following information:

Building Information:

  • Building type – Is it  a strip mall? Medical building? Mixed use? Is it free standing?
  • How old is the building – Is the building under construction? If it is, when did it start and when does it finish.
  • Structural information – How many floors? Is there an interior common area? Is there an elevator? a basement?
  • Parking – Is there covered parking? How many parking spaces on the site? Is there paid parking? How many parking spots exclusively available for this property
  • Rentable / Usable area in sq-ft
  • Signage –  Is lighted signage allowed? If so, where is it located? Is there a pylon signage? Directory inside the building? Is signage allowed on the front door?
  • Zoning – Is the space zoned for dental? Does the space need Change of Use Permit? Is there dental use or zoning restrictions?

Rental Terms of the Dental Office Lease Agreement:

  • Lease Terms – Initial lease term of how many years? How many renewable options are there? How long is the renewable option?
  • Rent – What is the base rent at initial lease term? How much will the base rent increase by per year during the initial term? and per year during the subsequent renewable option periods?
  • Type of lease – is it a Net or Gross lease?
  • Incentives – How many months of free rent during build out / construction? How much Tenant Improvement Allowance will the landlord provide?
  • Tenant’s proportionate or pro-rata share of the building – what percentage?
  • Common Area Charges – Does tenant pay pro-rata share or is it included in Gross rent?
  • Fire and casualty insurance – This is different than your business insurance. Does tenant pay pro-rata share or is it included in Gross rent?
  • Taxes – Does tenant pay pro-rata share or is it included in Gross rent?
  • Estimated Common Area Charge / sq-ft – what are these charges based on – previous history or 1st year estimate?
  • What are the estimated Real estate taxes / sq-ft – is the estimate based on partial or full assessment?
  • Heat / AC – Is it included in CAM? Gross rent? or is it separately metered to the tenant?
  • Water / Sewer – Is it included in CAM? Gross rent? or is it separately metered to the tenant?
  • Electricity – Is it included in CAM? Gross rent? or is it separately metered to the tenant?
  • Janitorial – Is it included in CAM? Gross rent? or is it separately metered to the tenant?
  • Dumpster – Is it included in CAM? Gross rent? or is it separately metered to the tenant?

How is the Space now?

  1. Was the space ever occupied?, If it was ever occupied, and is now vacant, how long has it been vacant for? If it’s occupied, when will it be avaiable?
  2. Is the space built out as dental office, some other office use or retail?
  3. Will the space be delivered either as it exists NOW or will it be completed by landlord prior to delivery to the tenant WITHOUT any cost to the tenant or deduction from the tenant improvement dollars?
  4. Does the space have a dedicated HVAC or is it shared w/ other tenants? How old is the HVAC and what is the capacity of the HVAC in tons? How many zones does it have?

You must have answers to all these questions from the landlord or anyone in authority who can speak on behalf of the property. This information is a must-have so you know what you’re getting into. Such details are never spelled out in a commercial ad posting, so you cannot compare one property to another unless you know what the $/sq-ft is really giving you.

Once you have this information, and if you’re considering even going forward with putting in an offer, I strongly recommend you get the space looked at by a building contractor prior to starting any negotiations.

I’ll go into choosing a contractor in future posts, but for now, choose a contractor that has built dental offices before and have them come take a look at the space. You’re not signing a contract with a contractor, you’re simply showing interest in the contractor’s services.

You may be wondering why should I have a contractor come look at the space before I put an offer down?

To avoid the same mistake I made that cost me $8000 extra in construction costs.

If I knew beforehand what I was getting into, I would’ve negotiated the extra expense of putting in an underground septic tank into my Tenant Improvement Allowance.

Bringing in a dental contractor to do a preliminary “inspection” of the empty space will allow you to find out if there’s anything major that needs to be fixed prior to you signing the lease. If there is something that is of major expense, you will want to consider that into your negotiation of your lease with your landlord.


When you’re looking at an ad posting for a commercial space, simply looking at the price will not paint the whole picture. You need to know what you’re really getting and what your total expenses are going to be, so you don’t leave money on the table when it comes time for negotiating your dental office lease.

Do your part and spend the time to gather all information you need prior to starting negotiations.

Work with a professional – Going back and forth with dollar amounts for rent is NOT all that it takes in negotiating a lease. There are other conditions and clauses that may be in the contract – which will jeopardize the sale of your office in the future.

Unless you do this professionally already, I strongly urge you to give George Vaill a call – or other lease negotiating expert that will walk you through this process keeping YOUR best interests in mind.

 Next, I’ll get into what’s involved in making an initial offer and the start of the negotiation process.