Bisnow Scoop: Medical Tenants' Groundbreaking Group Negotiation
Taking advantage of power in numbers, Henry S. Miller medical office broker Rebecca Harrell repped a group of healthcare tenants in their lease renewal negotiations for an out-of-the-medical bag strategy that worked for both sides of the deal. We went inside the doctor’s office for the surgical details.
Rebecca got the call from a physician who learned that six neighbors had leases expiring in the next year or two. He asked Rebecca to assist a collaboration of doctors in the renewal of their leases at Tuscan Professional Building in Las Colinas. Rebecca said this isn’t the typical kind of deal as most tenants don’t use one broker to negotiate all of their renewals simultaneously. As an individual practitioner with only 1,200 to 1,500 SF, there’s not much clout, but when packaged up with someone with 8,000 SF, you’ve got more leverage, she says. (It's the same concept behind political petitions and Star Wars conventions.)
Rebecca worked on seven leases that were originally inked as part of a new building with different expiration dates. As renewal time approached, the remaining obligation was different for each tenant and they wanted to make sure they obtained the most favorable rate and concessions from the landlord, she says. Two of the seven tenants didn’t renew because the landlord didn't want to renew. The others renewed and were able to work cooperatively, she says. It’s also a win for the landlord to lock in those tenants, she adds. The final negotiated renewals totaled approximately 16k SF for Texas Digestive Disease Consultants, Medical & Surgical Clinic of Irving, Podiatric Medical Partners of Texas, Orthopedic Center of Las Colinas, and Betty Chung Grasty, MD. The landlord, Universal Healthcare Trust, was repped by PM Realty Group’s Ryan Dale.