The Physician's Guide to Better Real Estate Decisions August 18, 2026

Physicians spend years mastering their profession. From medical school through residency and into practice, every decision is made with one goal in mind: delivering the best possible care to patients.

Real estate is different. Most physicians lease office space only a handful of times during their careers. Yet those decisions often involve one of the largest financial commitments a practice will make.

The terms negotiated today can affect operating costs, patient satisfaction, staff recruitment, practice growth, and even the long-term value of the business for years to come. The challenge isn't that physicians make poor business decisions. It's that they don't make real estate decisions often enough to know which questions matter most.

A lease is far more than a rental agreement. It is a business strategy.  A lease should support your practice and not limit it. Whether you're opening your first office, renewing an existing lease, expanding your footprint, or planning for retirement, the following principles can help you make better-informed real estate decisions.

1. Start Planning Earlier Than You Think
One of the most common and costly mistakes medical practices make is waiting too long to begin planning.  Whether it is renewal, relocation or opening a new practice, not building in time for the process can be a costly mistake.

Many physicians begin evaluating their options six to nine months before their lease expires. By that point, the practice often has limited leverage, fewer options, compressed construction schedules, and little time to negotiate meaningful concessions.

Beginning the planning process 18 to 24 months before lease expiration (the same holds true for renewal or opening a new location) provides significantly more flexibility. It allows the practice to evaluate multiple buildings, compare financial proposals, develop space plans, and negotiate from a position of strength rather than necessity.

Perhaps most importantly, beginning early gives physicians the ability to make thoughtful business decisions without disrupting patient care. The best lease negotiations begin long before negotiations start.

 
Typical planning timeline

2. Not Every Office Building Works for a Medical Practice

From the street, two office buildings may appear nearly identical. Behind the walls, however, they can be dramatically different. Unlike traditional office users, medical practices rely on infrastructure that many commercial buildings were never designed to support.

Electrical capacity, plumbing, heating and air conditioning systems, structural loading, elevator size, accessibility, emergency power, and patient circulation all influence whether a space can function efficiently as a medical office. These issues often remain hidden until architects or contractors begin evaluating space.  Even worse, if they are not found until after the lease is signed, then that will cost a significant about of time and money.

Before comparing rental rates, physicians should first determine whether a building can realistically support the operational requirements of their specialty.

The objective isn't simply to lease space. It's to select a building that allows the practice to operate efficiently for years to come. The right building should fit the practice and not force the practice to adapt to the building.

3. Stop Comparing Rent. Start Comparing Occupancy Cost

Rental rates receive the most attention during lease negotiations because they're easy to compare. Unfortunately, they rarely tell the entire story.

Two buildings offering similar rental rates may have dramatically different total occupancy costs, operating expenses, parking, utilities or maintenance responsibilities. Construction costs are particularly important. Specialized plumbing, electrical systems, imaging equipment, and custom exam room layouts can have a major impact on the total investment required before seeing the first patient.

Practices should evaluate the complete financial picture rather than focusing solely on rent. Sometimes a higher rental rate results in a lower overall cost because the building already contains much of the required infrastructure or offers more generous concession packages (improvement allowances and free rent).

The goal isn't always just to negotiate the lowest rent. The goal is to create the greatest long-term value. The least expensive lease isn't always the lowest-cost decision.

4. Know Your Counterparty

Most physicians (and their brokers) spend considerable time evaluating office space.

Far fewer spend time evaluating the landlord. Ownership matters.

The financial strength, investment strategy, and long-term plans of a building owner can directly influence construction timelines, tenant improvement funding, property maintenance, and future lease negotiations.

Questions worth asking include:
•    Has the property recently changed ownership? 
•    Are major capital improvements planned? 
•    Does ownership have the financial resources to complete tenant improvements? 
•    Are there upcoming loan maturities or refinancing pressures? 
•    Is the owner actively investing in the property or simply maintaining it?

Understanding who owns the building is just as important as understanding the space itself.

5. Plan for the Practice You Want Five Years From Now

A lease should do more than solve today's space needs. It should support the future direction of the practice.

Healthcare is evolving rapidly. Practices expand, physicians retire, associates become partners, technology changes, and many independent groups eventually explore mergers or affiliations with larger health systems. Private equity investment has also accelerated across many specialties, making the flexibility of a lease more important than ever.

Unfortunately, many practices select space based solely on today's staffing levels and patient volume. Within a few years, they find themselves out of exam rooms, short on administrative space, or unable to accommodate additional providers without relocating.

Before signing a lease, physicians should ask several long-term questions:
•    Will the practice add physicians? 
•    Could additional procedure rooms or imaging services be added? 
•    Would this location still meet the practice's needs if patient volume increased by 30 percent?

A successful lease should accommodate growth, not simply today's requirements.

6. Your Office Is Part of Patient Experience

Patient experience begins long before a physician enters the exam room. The first impression often starts in the parking lot or the lobby of a building.

Patients notice whether parking is convenient, whether the building is easy to find, whether elevators are reliable, and whether navigating to the suite is intuitive. For elderly patients or those with mobility challenges, accessibility can be as important as the quality of medical care itself.

While physicians naturally focus on clinical excellence, the physical environment also shapes a patient's perception of the practice. Several questions worth considering include:
•    Is parking adequate for patients and staff? 
•    Are entrances easy to locate? 
•    Is the waiting area comfortable and welcoming? 
•    Does the location reinforce the image the practice wants to project?

An exceptional medical practice deserves an environment that supports the level of care being delivered. The patient experience starts before the appointment begins.

7. Protect Your Practice Before Problems Arise

Most physicians focus on economics during lease negotiations. Equally important are the provisions that protect the practice after the lease has been signed. The most valuable lease clauses often receive little attention because everyone assumes they will never be needed.

Until they are. Examples include:
•    Renewal options 
•    Expansion rights 
•    Assignment and subleasing provisions 
•    Signage rights 
•    Exclusive use protections 
•    Relocation clauses 
•    Responsibility for building systems and maintenance

Each of these provisions can significantly affect the practice if circumstances change during the lease term.

For example physicians considering retirement or the sale of a practice should understand how lease assignment provisions could affect the transaction. The goal is not to anticipate every possible scenario. It is to create flexibility wherever practical.

The strongest lease is one that protects the practice when circumstances change.

8. Understand the Risks Before They Become Expensive

Many of the most expensive real estate problems are entirely preventable. They simply are not identified early enough. Unexpected construction costs, permitting delays, infrastructure deficiencies, landlord approval requirements, utility limitations, and code compliance issues can all affect both budget and schedule.

These challenges are rarely the result of poor intentions. More often, they stem from assumptions that were never verified. Here are some typical assumptions we have seen doctors make over the years:
•    Assuming additional plumbing can be added. 
•    Assuming electrical capacity is sufficient
•    Assuming the construction will take two months when in reality it is three months

The earlier those risks are identified, the more options exist to solve them. Due diligence is not simply a step in the leasing process. It is one of the most valuable investments a practice can make before committing to a long-term location.

The most expensive surprises are usually the ones that could have been discovered before signing the lease.

9. Build the Right Advisory Team

Physicians routinely rely on specialists. They consult accountants on tax matters, attorneys on legal issues, architects on design, and engineers on building systems. Real estate should be approached with the same mindset. Experience matters.

Practices should work with professionals who understand the unique operational requirements of healthcare facilities and who have experience with similar specialties. An orthopedic practice, behavioral health provider, dermatology group, ambulatory surgery center, and pediatric office all face different challenges and priorities.

The objective is not simply to complete a transaction. It is to assemble a team capable of identifying potential issues early, coordinating the process efficiently, and allowing physicians to remain focused on patient care.

Why MSDC Partners with Colliers

The healthcare real estate experts at Colliers specialize in helping physicians evaluate options, identify risks, negotiate favorable terms, and develop long-term real estate strategies aligned with their business goals.

Whether you're considering a lease renewal, opening a new location, expanding your practice, or planning for a future transition, having an experienced healthcare real estate advisor on your side can help you avoid costly mistakes and make more informed decisions.

The right real estate strategy allows physicians to focus on what matters most: delivering exceptional patient care.

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