Location, Location, Location

In the fifth part of Dr. Stewart’s Cold Start Series, she emphasizes the importance of location when opening your new practice.

There are three things that matter in a property: location, location, location. We have all heard that quote time and time again as it pertains to residential real estate, but does the same hold true for commercial properties and the success of a cold start optometric practice?

While working on my business plan and mission, vision, and values statements for my cold start practice, Look New Canaan, I knew that the location I ultimately chose for my practice was going to be crucial to the success of the business model I had in mind. My prior private practice was on the third floor of a large medical building, which, while less expensive, made it difficult or impossible to attract walk-in traffic.  

Part of my vision (pun intended!) for Look New Canaan was to find a retail space on a walkable street, with a lot of foot traffic and visibility. I knew this would cost me more overall for rent, but I also knew that the right location would pay off substantially. I had a picture in my mind of a storefront space with lots of large windows, natural light, and a beautiful street presence.  

What did I learn along my journey that may help other cold starts?  

Don’t Go At It Alone!
Finding real estate was definitely something new to me. My prior practice expanded to a new location that was in our same building, so I had no experience working with a commercial realtor or negotiating a retail space. Rather than go at it alone, I decided to work with a commercial realtor from Carr Realty. What appealed to me was that they only worked in health care, and they understand our unique needs and challenges. Having someone on my team to help me understand the alphabet soup of NNN (triple-net lease), TI (tenant improvement), and PSF (per square foot) was incredibly helpful.

Be Flexible
When we started on this journey, I had a space already in mind. It was one of the first spaces we looked at, and we immediately started negotiating the lease. However, we quickly ran into some challenges. Every email exchange took days before we got an answer, and the landlord was inflexible in many of the specifications in the lease. We tried to find a middle ground but ended up walking away. I had to regroup and look at other spaces, but at the time, nothing else fit my criteria for location and space.

I decided to modify the square footage and look at spaces slightly smaller. I knew I could be creative with design and try to maximize a smaller space, and this opened up a lot more options for me. One of these spaces ended up being our current home for Look New Canaan, and it was actually the perfect size. Sometimes a little flexibility goes a long way.

Be Authentic and Don’t Settle!
Before you set out on looking for a practice location, you have likely discovered “your why” for cold starting. What does that practice look like? What location would best support your business model? Once you have this in mind, keep it there.

But Dr. Stewart, you just talked about the virtues of flexibility! Yes, being flexible is important, but so is not compromising. I knew without a doubt that I needed a retail space with great visibility, but I also looked at traditional medical/office spaces with my realtor to get the full comprehensive picture of the options available. We looked at some amazing spaces, but I knew they weren’t right. I was willing to wait and be patient (however difficult it was) to find the right space to support my vision. I did have the luxury of time, and this can be more difficult if you’re moving offices or if you’re under a time crunch. But for me, the right space was worth the (slight) wait.

Triple What?
Commercial real estate is a completely different animal than residential real estate. There are so many different types of leases, and what they include can be vastly different. Some leases are full service, meaning they include everything. Others are what is called “triple net,” meaning the tenant pays the real estate taxes, building insurance, maintenance, and utilities separate from the rent. This is usually quoted as a cost per square foot, so knowing this ahead of time and being able to understand the full amount and properly budget is essential.

Everything Is Negotiable
The other important rule in real estate? You’ll never know until you ask. Don’t assume that everything that is in the listing is non-negotiable. This is where having a trusted real estate partner can help you decide where to push and where to back off. They can also help you decide what is more important — asking for a lower monthly rent? Asking for more TI (tenant improvement money)? Understanding the long-term ramifications of each is very important, especially over a 10+-year lease period. Our current space was initially listed at a higher monthly rent, and my realtor was initially worried that it wasn’t going to be in my budget. It turns out our space had been vacant for many years and needed a very specific tenant, so they were willing to negotiate to get the space filled. You never know!

Know What You Are Signing
Make sure you also have an attorney review any contracts, so you have a full understanding of what your responsibilities are. Many commercial leases include a personal guarantee, and having a complete understanding of exactly what your responsibilities are is crucial. As discussed, this can also be negotiated, but many ODs don’t fully understand exactly what they are agreeing to. There are so many nuances to a commercial lease, and having a professional review this and redline any changes or updates can save you a lot of time, stress, and energy down the line.

Be Creative!
It can often be challenging to look at a big, empty space and picture it as a beautiful, bustling practice. The flooring may be outdated, there may be walls that need to move, or a current tenant may still be there. Just like looking at a house, a little creativity can be needed to really envision the possibilities. The right location can often make or break a cold start, especially in the beginning. So many factors go into choosing the right space, but having a good support team and a little flexibility and creativity go a long way.

In the next installment of this series, we will tackle the design aspect of a cold start, which can often be one of the hardest parts of the journey!

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