Analyzing a Lease in a Practice Aquisition

July 16, 2018 by omniadmin Buyer Articles, Buying a Practice 0 comments

Often times, a potential buyer of an existing practice will simply take on the existing lease that the seller had with the landlord. The seller will do what’s called a lease assignment and assign the lease over to the buyer. But, did you know that there may be a chance you can renegotiate terms in the lease even though there may be a few years left to the end of the term?

When you get a copy of the lease, you or your advisor should contact the landlord or property manager. Be sure the seller has informed the landlord that they are selling the practice first. If there is a short time left on the lease, the landlord may be willing to do an extension on the lease. You can put conditions on the extension that can include getting a tenant improvement credit to cover new paint, carpet, etc., free rent for a few months, lower rent, etc., I’ve even had a situation where the landlord loaned money to the tenant to completely remodel the practice.

Remember that everything is negotiable. Don’t automatically assume the lease is set and you cannot change anything. At the same time, know how to negotiate. If you go for a home run right off the bat, you may turn off the landlord and they won’t be willing to negotiate. If you’re working with a broker, it’s best to let them handle the negotiating. They’re the experts and can save you thousands if done right.

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