Locating Medical Real Estate: The Request for Proposal (RFP)

Posted on February 13, 2013 by MREA

During an organization’s planning process, a consideration of how medical space should be acquired will be determined. Whether by lease or purchase, via development or existing retrofit, the option selected should be derived by the real estate’s ability to provide the desired utility at the lowest cost. The financing function will determine how to fund the space acquisition, whether through existing capital, mortgages, or operating lease.

For reasons of flexibility, timeliness, economies of scale, and availability of funds, leasing is a better decision. Otherwise, when cash flows dictate the opportunity to purchase an existing facility, a simple step should be undertaken to diligently search for the property that best fits the criteria.

For the purposes of targeting existing facilities to meet the specified criteria, reduce time, improve clarity, as well as bargaining position, it is important to utilize a document that is called a Request For Proposal (RFP). This, as a precursor to the landlord’s formal proposal, and which will answer the following general questions:

Who will occupy the space or property?
What type of space or property is required, leased or owned?
What growth space will be required, now or future?
When is space requirement needed?
How long will the current need for such space last?
Where should the property be located?
What are special requirements?

For examples of purchase RFPs, please contact us here. As for acquiring lease space, items to consider in a Lease or Sublease RFP commonly are:

Premises requirements (rentable or usable square feet)
Term of the lease
Commencement date
Rent abatement (Free or deferred rent)
Rental commencement date
Rental rate
Escalations or adjustments
Improvement allowance
Space planning and design services
Expansion option(s)
Renewal option(s)
Property management and tenants
Operating hours
ADA compliance and access
Extended or after hours HVAC
Telecommunications
Security
Parking (# per 1,000 square of rentable space)
Asbestos
Nondisturbance
Response to RFP due date
Exhibits (if applicable)

Are you seeking an example of our Medical Real Estate Request for Proposal (RFP)? Require real estate guidance for a purchase or lease of a medical building in Texas?

Contact:

Robert S. "Bob" Lowery 
Managing Partner
MREA Medical Real Estate Advisors
1200 Smith Street, Suite 1600
Houston, TX 77002

713.701.7900
office@mreausa.com

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Tenant Needs Within A Medical Office Building

Posted on December 12, 2012 by MREA

As a truism, the quality of a medial tenant will have a significant bearing on the process of procurement or assignment of healthcare real estate space. This is especially true when considerations are addressed for a tenant that is renewing, expanding, contracting, or relocating within a medical building.

In each circumstance, the overall design of the facility and potential costs associated will account for whether the leasing process will be simple or challenging, on a relative scale. With this in mind, a healthcare real estate advisor has the ability to influence the process positively due to their unique concentration within health care and commercial real estate.

The Renewal

Upon the majority of renewals, the size and layout of the medical office is not altered and the suite design or reconfiguration is avoided. Other times, tenants will request these or other modifications to their space.

Typically, a broker will request the approval of the landlord to determine how the costs will be distributed and who will be responsible. In some cases, the landlord will have budgeted this expense and can absorb the costs. But, most of the time, they will not. Thus, a certain percentage of the cost will be provided. In other cases, the tenant will be responsible for all modifications.

Rental market conditions should dictate who assumes financial responsibility for alterations. To determine market conditions, a good barometer procure a specialist that is educated on the short term availability and effective price of comparable lease space.

The Expansion

Expansion is typically a costly and difficult undertaking for medical tenants. This, due to the increase in overall space, and consisting of additional construction costs, as well as management and accounting requirements. For a tenant to address an expansion request properly, the expenses need to be determined beforehand to limit the administrative liability associated with the request. Space planners or property advisors are very helpful for this logistic exercise. Again, and similar to renewal, the determination of costs should be based on comparable rental market conditions.

One of the main reasons tenants relocate is because their existing floor plan no longer meets the functional needs of the user. Thus, the requirement of expansion should be addressed prior to conclusion of lease. Running up against deadlines will not expedite or provide leverage for expansionary discussions.

If expansion is required in the midst of tenancy, commonly, the lease term will be extended for additional years. Under this circumstances, the costs will be attached to an amended lease and rate will be blended. Another potential outcome may be the continuation of the existing lease and expansionary space rental separated. The former homogenized term typically will favor the landlord, but is generally accepted in investment real estate.

The Contraction

A healthcare space contraction may become necessary because of several factors. Most commonly, it occurs with reorganization, subsidiary or referral base relocating, financial constraint, or regulatory requirement. While this pressure creates an uneasy position for the tenant, the landlord has the potential to react positively through status review.

If contraction request is made by the tenant during the midst of the lease term, a subletting consideration should be addressed via all parties to the original lease. Alternatively, if the contraction request is made towards the end of tenancy, the tenant’s advisors should be aware of the potential re-use of space, any limitations in plumbing or electrical, and costs associated with construction. An expert opinion for the effective contraction of space should be sought.

The Relocation

Too often a medical tenant will need to expand but the adjoining spaces will be occupied. Within most leases, a relocation clause exists that allows the landlord to, essentially, move a tenant into an alternate space. For expansionary needs, this clause may be utilized effectively by the landlord, while hesitantly by the expansionary tenant. To alleviate tenant concerns, the expansion space may include space planning costs, moving expenses, additional rent, and tenant improvements with above standard features.

Customarily, relocating within the building has challenges, but specialized relocation experts can be of considerable service to a landlord or tenant within medical space. The impact of change, via relocation, within or away from a desirable situation, has unique ramifications to both parties to the lease agreement. Understanding the advantages and disadvantages of relocation within a building will provide confidence when addressing landlord/tenant responsibilities.

Lease Renewals for Medical Professionals

Posted on October 25, 2012 by MREA

An important clause not to be overlooked within a lease contract is the renewal option. Renewal options pertain to the potential extension(s) of the lease upon the date of lease completion. Renewal options will contain language regarding lease rates going forward, concessions such as free rent and tenant improvement allowances and operating expenses. All of these terms are negotiable and will play an important role in the complete structure of a lease renewal. Renewal options are meant to provide flexibility for the tenant in the future. So, being aware of how to strike the right balance, within the lease as well as the renewal, will grant medical professionals the greatest flexibility and financial outcome for their real estate interests.

One of the most common errors healthcare providers make is negotiating lease renewals without the help of a commercial real estate professional, specifically those who specialize in healthcare lease and renewal transactions. Most healthcare groups tend to be self-reliant and entertain lease interactions from within their office. The reasoning is fairly simple, which real estate investors are aware; the majority of medical providers will rely on referrals by way of other medical providers. So, if location (even space) can be identified by referral patterns, then the use of real estate counsel is unnecessary. Or, if location will remain the same, then negotiations of a renewal may be handled in-house.

But, rather, successful medical groups, large and small, understand that in order to achieve growth, they need leverage. Landlords, especially those that are in the real estate business, negotiate with professional guidance from real estate professionals. For healthcare providers, selecting their own representation, one that has performed the same real estate surgery with multiple instruments time and time over, to advocate their position will assist in influencing the outcome favorably. Furthermore, because landlords authorize a split of the commission between the landlord’s broker AND tenant/buyer broker, providers have the opportunity to receive representation from a healthcare real estate professional at no out-of-pocket cost.

MREA is a full service, healthcare real estate firm headquartered in Houston, TX. MREA provides commercial real estate services to healthcare providers and commercial real estate investors throughout the State of Texas.

Ground Lease Structures, Motivations

Posted on August 13, 2012 by MREA

A land owner typically has one of several motivations for choosing to implement a ground lease instead of an outright sale for a parcel of land. The most common motivation is to preserve the opportunity to participate in the appreciation in land value over the term of a ground lease without the financial risks of developing.

Other examples exist for the owner where the:

Land has a low basis for tax purposes and owner receives rental payments without having to pay capital gains for the appreciation in value of the property.
Property is encumbered in debt in excess of the tax basis. The owner may want to avoid a sale where such a large portion of the sale proceeds, if not all, will satisfy the debt that the taxes payable will require of the net cash.
Tenant is of quality credit; the owner may encumber the interest in the land to secure a loan to be amortized by the rent payments under a ground lease. This would allow the owner to realize a large percentage of a sale or refinance for liquidity purposes without experiencing adverse tax consequences.
Land owner (i.e. hospital systems), may have concerns over how nearby tracts will be built in the future. Utilizing a ground lease can exert more control over the development than through the use of restrictive covenants through outright sale of a tract.
Land owner may not want to be associated with the development risks of improving the land and, rather, may defer these risks but remain a participant in future income.

The tenant usually has a select few reasons to ground lease.

The most frequent reason for ground lease is not having to obtain the cash for the purchase price of land. This motivation is to avoid having to relinquish the resources necessary for day-to-day business operations within the property. Essentially, the tenant is amortizing the cost of improvements and land payments over a period of time. But, ultimately, the aggregate amount of ground lease rentals will exceed the total of interest and principal payments required to pay for the outright purchase.

As for the structure and motivation, the landlord wants:

Tenant to occupy and pay rent for a long initial term;
To limit the tenant’s renewal options;
Rent payments to be adjusted frequently;
Rent payments to be fair market value (or higher).

The tenant wants:

Obligations for occupancy and rent for a short period of time;
Wants numerous options to renew at rates already negotiated;
No adjustments to rent.

Outside of the healthcare arena, the future of the ground lease and its success in matching interested parties are highly dependent the banking system, who can marry multiple components; land, tenants and developers. Within the healthcare transactional market, we expect that the ground lease will remain a source of control, and competition, for location-centric healthcare providers.

For historical healthcare real estate examples, studies, additional structures or request for attorney assistance, please contact Robert S. “Bob” Lowery at 713.701.7900.

A Healthcare Real Estate Success Story

Posted on April 1, 2012 by MREA

Given economic and regulatory uncertainties, a provider of healthcare services retains our firm to improve relationships with the physician practices that occupy several medical office properties around their hospital campuses. This essentially enables the provider with an opportunity to obtain positive economic outcomes such as tenant retention, property referral, good will and financial clemency.

Additionally, the provider wants to measure its own operations through the simple method of acquiring physician input regarding service delivery, as well as report on the present adequacies when compared to other like providers so as to audit possible tenant separation.

MREA collaborates with the client to coordinate a proprietary satisfaction assessment specifically geared towards to medical tenants. This includes:

Tenant survey of satisfaction with building services, property management performance and lease renewal intentions
Action planning reports for each hospital campus, region, service provider and the national portfolio, highlighting performance trends, strengths and weaknesses
Comparative performance analysis of year-over-year results and versus report
In-depth, statistical analysis of property and tenant characteristics influencing satisfaction, retention and relationships
Recommendations for the enterprise and each service provider to improve customer service delivery, strengthen relationships and boost retention
Customized presentation of the results and recommendations to each service provider’s national account management personnel and property management teams

While we will keep our results confidential, based on assessment the client:

Targets improvement initiatives toward highly influential property management practices, such as frequency of proactive communication with tenants
Requests action plans for improvement from each hospital campus and service provider
Increases tenants’ satisfaction with management by 10% to exceed benchmarks
Improves tenants’ likelihood of renewal rate by 5%
Identifies “at-risk” tenants whose lower satisfaction level and higher likelihood of defection warrants immediate property management follow-up
Strengthen physician relationships with property management and hospitals

We are proud to offer this service as part of a growing list of healthcare real estate competencies located here.

10 Lease Renewal Reminders

Posted on April 8, 2011 by MREA

1. The most important consideration any tenant may do is to hire a tenant representation broker, especially when relocation is an option. Working for both landlords and tenants, I can say for certain that having a tenant broker can provide a tremendous advantage during a renewal negotiation. Just by placing a tenant broker on your team can increase the leverage in your lease negotiation. In the Greater Houston market, it is traditional for the landlord to pay your commercial broker’s fees, so it is imperative to be informed about the commercial real estate marketplace through brokerage representation.

2. Second – begin early. You do not want to subject your company to a position where it is down to the wire and the terms will not be favorable. Most tenants neglect this point and end up signing a poor deal only because they were not familiar with the process and had no time to negotiate a better transaction. “Early” can even mean over nine months or greater in advance of the lease termination, especially for those spaces that are large, and whose lease documents were written previously in a complex manner.

3. On that note, review other options. Even if you are not considering other space, you should always keep your eye on other space. Have a number two and three pick for that “just in case” scenario. Performing proper due-diligence to see what the competition is offering for incentives is our job as tenant representatives. And, you will be surprised at what we can uncover. The simple fact that you have options lets your landlord know that you have alternatives.

4. Negotiations do not take place casually in your office or at showings. Even the largest companies make this mistake. Stop talking and start listening for negotiable items. So often, emotions and ego enter into negotiations and they will typically lead you to nowhere. Remember, these are business decisions that need to be handled behind the closed doors of your business operation.

5. Always have you landlord present you with the first proposal. This not only will lay the groundwork for a possible counter proposal by your team, but it will reveal what position the owner is angling.

6. Once you get your proposal from the landlord, always counter. Even if it looks like a great deal with everything you want, 99% of the time you can get more if you simply counter. In addition, you should always ask for more than what you want, that is, if you have a leg to stand on. Typically a back and forth takes place, so do not begin by asking for too little.

7. You should not put stock into how long you have been at your current property, how many times you have paid your rent on time, or how little you have called to report problems at your space. None of these items will present you with a better deal.

8. You should avoid having side conversations or direct conversations with your landlord or their representative. This can hinder your tenant representative’s negotiation power and can muddy the waters if things were promised in a side-conversation that your representative was not privy.

9. Your business should try and keep only those who need to know on a “need to know” basis. Rumors spread fast, especially among co-workers. You do not need the latest updates on your renewal negotiations to be made aware. In the end, this will hurt your negotiation efforts.

10. Lastly, I always recommend to my clients that you seek the assistance of a real estate lawyer before signing any legally binding documents. A good time to bring in an attorney is often when a lease document is produced for the tenant’s review. It is the attorney’s job to find the glitches, problem areas, and other questionable sections in the often lengthy lease document, that may not be in your best interests. If there are any, they should produce alternatives to the lease section language or suggest deleting it all together.

Time Is Money When Leasing Commercial Real Estate

Posted on January 18, 2011 by MREA

In my twelve years in commercial real estate, I have never seen a better opportunity for tenants to reduce costs and secure better space – at the same time! With a few exceptions in and around the Houston area, today’s commercial leasing market is a tenant’s market. Tenants should not shy away from renegotiating their leases early to take advantage of the favorable market conditions.

It’s All About Leverage

I have been saying the same thing to my clients for many years; lease negotiations are largely about leverage. In a landlord’s market, the only leverage a tenant has is to begin negotiations early and keep all options open, including moving to new space. For example, if a tenant has been leasing 20,000 square feet of office space for the past fifteen years it is unlikely that the tenant wants to move. Landlords know this. Therefore, the landlord will wait until as late as possible to approach the tenant about renewing its lease. Waiting serves the landlord’s interests, because at some point there is not enough time for a tenant to find new space, negotiate business terms, engage legal counsel to document the deal, complete improvements to the new space, pack up their existing space, retain a moving company, and move into the new space. Depending upon the size, type, and complexity of the space, negotiations should begin anywhere from two years to a few months in advance of commencement. Many small commercial tenants believe that they can pack and move into a new space that does not require improvements quite quickly, however, they frequently forget that at least a few months must be allotted to finding the new space, negotiating the business terms, completing legal documentation, and moving.

Leverage shifts to the landlord in negotiations when the landlord knows the tenant does not have sufficient time to move before the expiration date of the tenant’s current lease. Unless there is a provision in the tenant’s current lease to the contrary, the tenant will likely become a holdover tenant on the first day after the expiration of the term. In the best case scenario, the landlord will have to provide a thirty day notice to quit which would not be effective until the last day of the calendar month following the thirty day notice. Accordingly, in the best case scenario, a tenant would have sixty days to vacate if landlord delivered such a notice on the first day after the expiration of the term.

Early planning and action shift negotiating leverage to the tenant and save tenant money in the long run. For example, if tenant’s lease is set to expire on December 31, 2010 then the tenant should begin (or already be in) the process of renewal or new lease negotiation now. The tenant or representation should begin by sending out a request for proposal to its current landlord and to at least three other landlord’s with suitable space available. The proposals received will form the basis of tenant’s decision to move or stay and will help shift leverage to tenant in its negotiations. Making it known to the current landlord and others receiving the request for proposal that all options are being considered. To keep confidential the fact that tenant is exploring all options is to negate the leverage obtained by starting early and exploring options.

How to examine a proposal and what information to request be included in a proposal is the topic of another article, but suffice it to say for purposes of this article that the tenant should negotiate each possibility seriously to obtain the best possible business terms. Such terms are not simply about rent, although that is the single largest business term, but also about obtaining other tenant friendly provisions or rights. A tenant’s current lease may not permit assignment or subletting without landlord’s consent, which consent may be withheld by landlord for any reason or no reason at all. Such a provision is not tenant friendly or reasonable, in my opinion. The tenant should state in its request for proposal that the right to assign and sublease with landlord’s consent, which shall not be unreasonably withheld, delayed, or conditioned, is an important business term to tenant (there are many variations of this provision that may be important for one reason or another to the tenant, but for example purposes, I have kept this simple). Any proposals received that include this provision can then be used to negotiate such a change in the tenant’s current lease if the current landlord submits a competitive proposal.

Multi-Track

In my experience, the average new lease acquisition unfolds something like this: A prospective commercial tenant will look at various spaces and make a decision about which space best suits their needs and desires. Based upon that determination, the tenant makes the decision to lease that space and requests landlord’s form lease. The tenant then goes back to the office and waits for the landlord’s draft lease. Several weeks may go by before the initial draft is received. During the wait period, the tenant is comfortable that she has found the space she wants and all other leasing activities have ceased. Either through communications between tenant and prospective landlord directly or through brokers, the message is communicated that the tenant is excited about the new space and ready to move.

The landlord’s draft lease arrives and it is a typical landlord oriented lease. During legal review, many issues arise that tenant’s counsel advises against, but tenant reminds its counsel that this is the space tenant wants and there are no other options being considered. In addition, it is most likely too late to consider other space because now there are only two or four months left until expiration of the current lease as opposed to the six, nine, or twelve months that were left when tenant first began to search for new space. Tenant’s counsel negotiates the best deal possible considering that landlord is not willing to negotiate too much because landlord knows the tenant really loves the space and does not have time to find and negotiate new space before its current lease expires.

The point is that the tenant should always be multi-tracking its negotiation process. The tenant should begin early and always continue negotiations with current landlord and prospective landlords until the tenant’s attorney is comfortable that the form of lease is negotiated to a point where the remaining issues are not significant. This way the tenant can say to the landlord “the first one to give me a lease that my attorney says I can sign wins”. With that pressure and leverage, the deal will move faster and most landlord’s will be more willing to negotiate.

Yes, this multi-track approach may result in a longer period of time spent up front, however, it should result in a better rental rate and better lease terms for the tenant, which will more than pay for itself in the long run.

Example

An office tenant’s lease was set to expire December 31, 2010. The tenant has a small space of approximately 2,500 square feet, but it is in a Class A Building in the Energy Corridor, so even that small space equates to significant dollars. In December 2009, the landlord approached the tenant about renewing for ten years. The tenant was receptive and asked the landlord for a proposal. The proposal was promptly faxed over to tenant and stated that renewal would be for ten years at $25 per square foot with a formula for escalations. The tenant was inclined to agree and execute a renewal amendment because, as the tenant put it to me, “the landlord is a good guy and I trust him. He said this is the going rate now”. The tenant’s wife convinced him to call me just to be sure everything was okay.

The tenant reluctantly called me and faxed me the landlord’s proposal and their current lease. I quickly determined that the landlord had other vacant space in the building that was advertised at $22 per square foot. I brought this to the landlord’s attention and he dropped the proposal to $22. That saved the tenant approximately $75,000 over the term.

I then suggested to the tenant that they look at other spaces on the market. They did and found two spaces that they loved. They received proposals from both of those landlords one of which was at $22 per square foot and one of which was at $21 per square foot. I then reviewed their current lease and made a list of provisions that were deficient or unfair to the tenant. We redacted the proposals from the two vacant spaces so that the landlord and address were not visible and sent them to the current landlord. The tenant told the current landlord that while they would like to renew in place, they were willing to move if they did not get terms they considered favorable. The landlord did not cave right away, but the tenant’s determination to move if the current landlord did not improve its proposal led to a ten year renewal at $20 per square foot, an increased base year for taxes and expenses (left out of landlord’s original proposal), release of tenant’s personal guaranty, and other changes favorable to tenant. I have no doubt that without the credible threat of moving, the tenant would not have been able to negotiate such a good deal. In the end, the tenant will save around $125,000 over the ten year renewal term and have no personal liability.

Cautions

Shifting leverage by shopping around and knowing the market conditions is one thing, but taking the opportunity to renegotiate other terms of the lease is another. Tenant’s must bear in mind that a landlord may perceive renegotiation of lease terms other than base rent and length of renewal term to be a renegotiation of the entire lease. Accordingly, the landlord will feel free to review the lease for provisions that the landlord would like to see amended to suit the landlord. There is not much that can be done about this except to plan carefully with your legal counsel and utilize whatever leverage can be mustered.

To a large extent this is a game of chicken. Most tenants do not want to move and most landlords do not want to lose a tenant. However, there is no greater leverage for a tenant than a credible threat of moving. In some cases, tenants really do find better space and end up moving and that’s okay. However, without the credible threat the landlord has no fear of losing the tenant and little or no motivation to negotiate a good deal for the tenant.

There are many good brokers serving the commercial leasing community, however, it has been my experience that tenants should not share their strategy with their real estate broker or anyone outside the immediate circle of decision makers. In far too many instances, brokers and others, whether accidental or otherwise, have told landlords or landlord’s broker that the tenant is looking at other space, but they are not serious. Clearly, this negates the entire strategy.

Conclusion

While the principles espoused above work in all market conditions, the current conditions are exceptionally favorable to tenants. Landlords in most markets today are desperate to keep tenants and sign up new tenants. What I suggest in this article is not intuitive to most tenants, but if kept in mind I am reasonably certain that tenants will get a much better lease deal than waiting for the landlord to approach the tenant a couple of months prior to expiration. Knowledge of the market place and time to pursue all options equals leverage for the tenant.

“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.”- Archimedes

This article was republished from Robert S. “Bob” Lowery’s original post, “Tenants: Leverage is Key”, published on May 14, 2010.

EnerVest Expands Within First City Tower

Posted on October 17, 2010 by MREA

EnerVest, Ltd. has inked an early lease renewal and expanded its footprint in First City Tower in downtown. The oil and gas company signed a long-term lease for 117,316 square feet, an increase of 36,721 square feet.

EnerVest has been a tenant in First City Tower since the early 1990s. The company started out with just 5,000 square feet, according to Chip Colvill of Colvill Office Properties. He and Michael Anderson represented the landlord, FC Tower Property Partners LP, an affiliate of JMB Realty of Chicago, in lease negotiations. EnerVest was represented by Tim Relyea of Cushman & Wakefield of Texas Inc.’s Houston office.

For complete article, go to Globest.com.

Your link to this week’s Greater Houston real estate and business stories from local, regional and national publications. For a complimentary assessment of your commercial real estate interests, please contact Robert S. “Bob” Lowery.

Leasing Less Than 5,000 SF? You Are The Majority In Houston

Posted on October 15, 2010 by MREA

Did you know in the Greater Houston area that 47.5% of commercial real estate tenants rent less than 2,500 square feet of office space? And, per Costar data, another 20.2% lease between 2,500 and 4,999 square feet. Together, this means that nearly 68% of all commercial real estate tenants are 5,000 feet or under. Time and time again, we hear that small business owners are not willing to work with their landlords, as they feel favoritism is skewed towards larger tenants . They believe that they in the minority, and some consider themselves inferior when negotiating with the building ownership. But, the statistic alone proves that small businesses are powerful as they are the ones that consume the majority of the Greater Houston commercial real estate landscape. Small businesses are the lifeblood of Houston as they are what keep our city’s heart from failing.

Typically, small tenants do not occupy adjacent space to larger corporate tenants. This, in part, is due to the fact that large corporate tenants require their buildings to have a large open floor plate that is not conducive to a smaller tenant. Big corporations tend to take up multiple floors, if not entire buildings. Small tenants, on the other hand, tend to be grouped together. If you were to take a survey of Greater Houston commercial buildings, you will find that there are far more buildings that cater to smaller tenants – and that these buildings are the tenants that make up a substantial portion of revenue for their landlords.

Take, for instance, a building that is situated in the Galleria area that is comprised of smaller businesses. Such is the case in many Houston buildings, there may be 40 tenants in the building, all of which are of similar size. When you add up all of those tenants and the amount of space they’re renting and therefore, the amount of money they’re making the landlord, you’re looking at a majority, if not a total of the building’s gross rental income. Consider how much money your landlord would lose if you moved out, and multiply that by 40. That’s how important you occupancy is to the landlord, especially in a leasing environment where there is little to no demand, depending on your building’s aggressiveness. Always keep in mind that your building is just one of many that are full of smaller businesses; those that consume a majority of an individual office building as well as the total office space in all of Houston.

With small businesses comprising of close to three-quarters of Greater Houston’s commercial real estate market, such tenants have nothing to fret when negotiating price, terms, build-out, expansion or contaction. There is no reason to feel that your business will not have leverage in leasing discussions. On the contrary, small businesses are the lifeblood of Houston real estate and without them Houston’s office market would fail.

Your landlord cannot stand to lose you.

MREA | Medical Real Estate Advisors

Precision Guidance for Healthcare Real Estate

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