The COVID-19 pandemic has brought a lot of significant changes to the healthcare industry. This pandemic made providers take a look at their current mortgage and leases for their clinics and hospitals. Fortunately, this industry has remained resilient despite the various challenges it faced during a crisis. Know more about healthcare real estate on this site here.
Real estate markets are still going strong in the commercial sectors, thanks to minimal default rates, long-term leases, low interests, stable occupancies, and more demands for buildings and housing.
A positive impact that was brought in the healthcare sector is the desire of many landlords to work with healthcare tenants and buyers. Many of them wanted to help and contribute in some way, and they are renewing leases and doing negotiations for new ones.
The medical providers are still some of the sought-after prospects of land sellers and landlords. This is because their profession and financial stability are low-risk when you compare them to retail users or traditional company offices.
Today, the healthcare industry is one of the redeeming factors for many real estate investors’ portfolios, especially in the pandemic. When the optometrists decided to open back, they still had many patients who needed eyeglasses and blurred visions. When dental practices opened up, many of their patients contacted them for brace adjustments and cleaning.
Another thing that helped is that healthcare offices are more invested in finishing their current lease. Most of the tenants and landlords entered into a ten-year agreement, and they were favorable for both. These were plenty before the COVID-19. Medical providers are providing better terms because some landlords don’t want to risk vacancies and would want to secure tenancy as much as possible.
Since the long-term contracts and the industry’s stability are established, many investors in real estate tend to favor healthcare clients. Before completing a lease renewal, purchase, or considering a new location, you need to consider the various factors that can protect your practice well beyond the pandemic.
Real Estate Can Contribute to Significant Costs for your Practice
In the early months during the pandemic, many healthcare providers see an unknown future when they consider their transactions in real estate. The results were that many of them have closed the doors of their clinics to slow down the spread of the virus.
Without daily patients coming in and the need to complete clinical requirements, most of the professionals in the business have chosen to consider the profitability of their profession. They determined that one of their larger expenses every month is from their rentals.
Nowadays, you can get an excellent deal today compared to the days before the pandemic. However, know that timing is still everything. If you have a lease that’s expiring for the next three years or you’re considering expanding, see that it’s never too early to begin looking for a real estate agent.
The agent will negotiate the transactions on your behalf, and they will look for deals that will benefit you the most. Many of them will be able to focus on specific real estate deals while you’re busy with your profession. The professionals that offer healthcare real estate solutions will ensure that you avoid costly pitfalls. They will also make sure that there are no delays and will help you see blind spots.
Limit your Liabilities in the Future
Most of the blind spots may include lease clauses that were overlooked at the start of the contract. During the pandemic, many realized that they could not read what their contracts had stated, and they had more awareness of their need to protect themselves from the worst-case scenario. Being more aware of the contracts you’re signing is a good thing as you avoid all the liabilities and risks throughout the life of the lease.
When it comes to limiting liabilities, two specific issues need addressing. They are death and disability and lease assignability. Sometimes, physicians may sell their practice to their colleagues since this is a part of their exit strategies. Know more about an exit strategy on this web address: https://www.thebalancesmb.com/small-business-exit-strategies-2947988.
This is important because you should enter into a clinic lease that does not prohibit you from signing over your current lease to a new owner. You will also remove any liabilities against you by utilizing a personal guarantee. Similarly, the clause for death and disability should allow the tenants to be released from their current commercial lease. This will protect the doctor’s estate, family, and spouse. The two are negotiable, but they are often omitted in contracts.
Other clauses that you need to consider are the Force Majeure and the pandemic clause. This will protect you from obligations that may happen during extraordinary events and in times of a pandemic. Addressing all of these is often a specialty of many companies, and the experts make sure that they cover every important part of the negotiations.