Commercial real estate has made rapid advances in the last five years. As a dentist-tenant, you must be up-to-date about the latest trends in the dental office leasing industry. Commercial property prices are on the upswing, though the pace has dampened due to the pandemic that has put a dent in the dentistry practice globally.
While the commercial space prices were increasing steadily for the past decade, finding prime space was a challenge. Today, the picture is quite different. With a lull in prices, this is probably the best time for dentists to enter into a long-term contract, which they can bag at unbelievable prices and terms.
Anxious Landlords
Although COVID is surging relentlessly, several vaccines are out and doing the rounds. However, with the pandemic still raging, commercial tenants and landlords are an anxious lot.
Tenants are no longer sure of the business during COVID times, and landlords are looking at a bleak future with office spaces lying unused for too long. With restrictions on public gatherings and a strict no-no as far as dentistry is concerned, commercial spaces are up for the taking.
No Operating Remotely
The stay-at-home and work legal requirement may apply to dentists, though dentists and other healthcare services cannot practice social distancing. While the Healthcare Protection Regulations 2020 closed most pubs and restaurants’ shutters, dentists were still allowed to operate from their offices, though with total protection with PPE.
While dentists may grab their prescription pads to prescribe antibiotics and painkillers remotely for their patients, they need an office to examine a patient with a severe toothache, which may require surgical intervention.
The Right Time for a Long-Term Gross Lease?
Realty professionals believe that now is the right time for dentists to enter into long-term gross lease agreements. There’s a significant drop in prices, with many office spaces up for lease because of the pandemic. This lull in the market is set to continue for some more time. Dentists entering into a 10-year dental office leasing agreement can expect lower prices that may hold good through the lease period, though with minor clauses favoring the landlord.
Moreover, a gross lease agreement has fewer headaches as all aspects are taken care of by the landlord. With expenses like base rent and other support services included in the lease terms, today’s trend is to enter into long-term lease contracts, despite the uncertainty in dentistry practice because of COVID19, which shows no sign of abating despite the best precautions.
Government Proclamation on Restrictions
Things look bright for dentists, thanks to the government proclamation 20-24.2, as per the Washington State Dental Association. The proclamation released in November 2020 still holds good and does not impose any additional restrictions or limitations in delivering dental care, or healthcare, in general.
Healthcare providers, including dentists, are empowered by the Governor’s Office to self-regulate care based on parameters described in the proclamation.
COVID – Force Majeure?
Although the current commercial lease agreements do not feature a COVID19 force majeure clause, dentists may insist on adding such a clause. However, you may seek legal advice for including the clause. The clause should help protect a tenant if they cannot fulfill their contractual obligations due to the pandemic.
Summing it Up
Current real estate trends in commercial office space for dentists indicate a lull in the market due to COVID19. With vaccines already doing the rounds, it is not wrong to capitalize on the current situation and enter into long-term commercial leases.
