Reprinted with permission from JP Roach, Associate and Assistant General Counsel at Hughes Marino. Click here to read the original article.

Finding the right real estate for your medical practice can be laborious, time consuming, and expensive. At Hughes Marino, we help companies make the right real estate decisions for their businesses by delivering great spaces and lower rents.

In my role as leader of the Medical Practice Team, I help physicians and other healthcare professionals make the best real estate and space planning decisions for their practices. Medical space is very different from traditional office space with its own set of challenges that require the utmost care when leasing such space.

What follows are five mistakes doctors often make when signing a new medical office lease. Our Medical Practice team not only helps you avoid these mistakes, but also guides you through every step of the medical office leasing process to help you find the perfect solution for your practice.

1. Signing a Personal Guarantee
Landlords love personal guarantees. However, as a tenant, you should not. A personal guarantee is a legal contract between a landlord and an individual to guarantee a specific obligation of a business, usually the remaining rental obligation under a lease. Personal guarantees provide the landlord with additional recourse in the event of a default on a lease agreement. The implications of a personal guarantee are significant because your personal assets (e.g., house, cars, retirement funds, etc.) are at risk should you default on your lease.

The landlord will tell you the high cost of the tenant improvements that are often needed for medical office space creates additional risk, and that you need to sign the personal guarantee to provide additional security for your full performance of the lease. We disagree. The landlord who owns a medical office building should expect a high level of tenant improvements will be required. Further, the rental rate for medical office space is typically higher because of the tenant improvement contribution by the landlord. This is nothing more than a simple application of risk and reward. Yes, there is risk to the landlord in a real estate lease transaction, but that is why the rental rates for medical office space are higher than those for traditional office space. At the end of the day, it all comes down to the negotiations.

If the landlord wants to reduce risk by requiring a personal guarantee, should there not be a corresponding reduction of the rental rate? Are the improvements highly specialized? Is the medical practice a new business, or is there a solid history of financial performance to ease the landlord’s concerns? Are there other suitable properties where a personal guarantee would not be required?

If some form of personal guarantee is warranted, there are steps you can take to protect yourself and limit your exposure. For example, if you are in a partnership with multiple doctors, try to limit your guarantee obligation to your percentage ownership in the practice. Also, you should be able to structure a guarantee that declines each year as the landlord’s exposure is reduced.

Additional weapons in your negotiating arsenal can include a release of the guarantee based on the percentage of the lease or loan paid off, a specific end date for the guarantee, exclusion of certain personal items from the guarantee, and in some circumstances, personal guarantee insurance.

2. Underestimating the Cost of Tenant Improvements
Tenant improvements for a medical office suite can be very expensive. Building out space to fit the unique needs of your practice can range anywhere from $50 to $250 per square foot, depending on myriad factors such as the current condition of the existing suite (warm or cold shell), the level of specialized requirements for the practice (e.g., plumbing in exam rooms, lead walls for x-ray units, surgery components, etc.), and personal choice of improvement finishes.

It is important to understand the implications of the current condition of the suite and how that affects the purchasing power of each tenant improvement dollar the landlord is providing. A $25-per-square-foot allowance for a second-generation dental practice may be adequate, but the same allowance will barely get you started if you are building out from a “cold shell.” The point is to understand what you are getting into before you sign a lease. Our team helps you assess the current condition of a space by developing a detailed and competitive budget for the construction project while you are still evaluating your options.

3. Underestimating the Timeline and Complexity of the Build Out
Just as the cost for tenant improvements varies by practice specialization and current condition of the suite, so does the project’s complexity, and ultimately, the timeline for delivery of the finished space. For example, a practice requiring a surgery suite and digital x-ray units will take substantially longer to design, permit and build than a family practitioner’s office that may just require individual exam rooms.

We typically advise our medical clients to plan for a minimum six-month build-out period in order to design, obtain the appropriate permits, and construct the suite. For expensive and complex medical projects, the build-out period can be a year or even longer. So it is crucial to deploy the right team of experts from the outset.

Time is one your best leverage tools in real estate negotiations. If you run out of it, things can get expensive fast. Our team provides professional construction and project management so that you understand the complexity of the project and can plan accordingly.

4. Trusting the Landlords and Their Agents to Represent You
In a lawsuit, it is illegal, unethical – and even illogical — for an attorney to represent both the plaintiff and the defendant. There is an obvious conflict of interest. In real estate transactions this practice is called “dual agency,” and it carries with it the same inherent conflict of interest, except that it is legal and done all the time by so-called “full service” real estate agents. We are unique because we represent only tenants; never landlords.

Landlords hire the “full service” real estate agents to find doctors to fill their empty medical office buildings. These agents’ interests are in lock step with their landlord employers and their singular aim is to maximize the rent paid by the medical tenants.

On the other hand, tenants want to pay less rent. And yet many unsuspecting physicians trust these very same landlord/full service agents to advise them in their real estate negotiations. These physicians are often later disappointed that their agent did not do more for them in the negotiations. But if they understood the agent’s true allegiance, they would understand their motivation.

The inherent conflict of interest that exists in dual agency relationships plagues the commercial real estate industry and should be avoided by physicians – and other tenants – at all costs.

5. Trying to Go It Alone
The old adage may be, “Physician, heal thyself,” but when it comes to real estate, you are best served by an expert who will capitalize on market conditions to obtain the best possible real estate outcome for you and your practice.

Every space is different, and each landlord’s situation is unique. How long has the landlord owned the building? How long has the space been empty? Does the building owner have a large loan coming due?

Rents are not set by landlords; they are set by tenants. What a landlord is willing to accept is often subject to wide swings based on what the tenant will agree to pay. But don’t try to go it alone.

As a physician, your time is best spent focusing on your practice and working with your patients. The same way you hire a practice manager to manage your practice, an attorney to handle your legal affairs, an accountant to handle your taxes, and a financial adviser to manage your wealth, find a qualified, conflict-free medical office expert, someone worthy of your trust, and then empower that real estate professional to guide you in your real estate planning and negotiations to save you time, risk, and money.

The first step is to start with Hughes Marino. Please feel free to contact JP Roach, head of Hughes Marino’s Medical Practice division, directly at jp@hughesmarino.com for a complimentary analysis of your practice’s real estate needs.

JP Roach is an associate and Assistant General Counsel of Hughes Marino, a San Diego commercial real estate company specializing in San Diego tenant representation and building purchases. Contact JP direct at (619) 238-2111 or jp@hughesmarino.com to learn more.

This season’s best lab coats for men represent a vast improvement over most of the lab coats available on the market today. Gone are the days of flimsy, ill-fitting coats with abrasive fabric that stains easily. The next generation of lab coats are now here to stay, featuring impeccably hand-sewn seams and superior quality fabric that not only resists stains but resembles something more akin to a tailored suit blazer rather than a lab coat. Here are our favorite styles for men this year:

1. Laennec Men’s 40″ Lab Coat. This lab coat is built for the modern health care professional looking for an updated appearance while on the job. It’s the standard size for most male physicians and a favorite among most Medelita-mens customers.
2. Osler Men’s 44″ Lab Coat. The Men’s Osler Lab Coat is the ultimate display of prestige and aptitude for healthcare professionals. It includes five pockets, including one for a normal iPad or any other device.
3. Fauchard Men’s 40″ Dental Lab Coat. The only lab coat that has it all – snap buttons, cuffed sleeves, ergonomic fit to allow maximum forward pronation, and a high collar for superior protection.
4. Fleming Men’s 30″ Student Lab Coat. This men’s consultation lab coat is perfectly suited to make an impression before, during, and after the white coat ceremony. It is by far the most impressive student lab coat available in the industry today.

Feel free to browse the full list of men’s lab coats by Medelita at the Medelita Men’s Lab Coats Page.

As our customers surely know by now, we have been making every effort to outfit our lab coats with pockets that are large enough and reinforced to comfortably carry an iPad while at work. According to our own research, at least 75% of doctors own an Apple device, and due to the demand for iPad lab coats we have been seeing more sales of those products than any of our other styles. Yet for those M.D.’s that haven’t heard of Medelita, there’s some growing excitement about the size of the iPad Mini. Of course, we’re excited as well, since the iPad Mini should be able to fit in the pockets on all of our current styles.

We’re also excited about some of the new apps that are being released over the next year that have the potential to change the way doctors and clinicians treat patients. One app we’re excited about is called “Share Practice,” which acts as a “social clinical reference tool that doctors use to collaborate on treatments, discover clinical research, and rate treatment efficacy.” According to the company’s website, 1 out of 3 contacts in a doctor’s phone is another doctor. If that’s true then it only makes sense to tap into those contacts to “crowdsource” the most effective treatment options. In any case, apps like these only add to the demand for smart phones and portable tablets as a legitimate tool in a doctor’s arsenal. What do you think? Tell us what apps you recommend for your colleagues!

By Michele Shermak, MD
Reprinted from Young Plastic Surgeons Perspective, April 2003 Plastic Surgery News.
Despite exuberant clinical exposure during plastic surgery training, important practical issues related to day-to-day practice as an attending may not be addressed, particularly for private practice situations.

Having come to terms with this lack of education, our Young Plastic Surgeons (YPS) group has compiled a “Top Ten” list of focus areas that require greater attention prior to entering the real world – so that those currently in training or thinking of entering a different practice scheme might be better prepared:

• Coding
• Job selection – Working in practice with a partner is like a marriage. Don’t be seduced by money alone. Check into your predecessors’ experiences
• Direction – Determine the direction you want your practice to take. Don’t let someone else do it for you
• Marketing – How to successfully market a plastic surgery practice and reach the best referral sources
• Ethics – Understand what is allowed and what isn’t
• Mentors – Identify supportive mentors early in your career, and avoid individuals who perceive you as competition
• Advocacy – The importance of reaching out beyond the scope of daily plastic surgery practice and making a difference
• Negotiating with insurance companies – Whether to join programs; which ones to join and which ones to avoid (you may only need to be on a few specific plans)
• Patience – Be patient while building your career and practice. It takes four to five years to get busy
  Balance – How to balance life and work

Additional active education may be necessary on the trainee’s part to research these focus areas and effectively improve the transition between residency and practice. In fact, resources are in place to ease the process. ASPS sponsors programs specifically directed at practice management, marketing and coding. Friends and colleagues several years out would be useful mentors as well, having recently experienced the process.

- Dr. Shermak is the YPS Perspective editor and an assistant professor of plastic surgery at Johns Hopkins Medical Institutions.