In 2017, the San Francisco commercial space market was buzzing. It proved to be the strongest year to date with some of the biggest deals ever seen in the city taking place – like Dropbox’s lease for 736,000 square feet.

According to Colliers International in 2017 Leasing activity in San Francisco continued to be robust with approximately 2.4 million square feet of transactions recorded”.

While we all collectively sigh in relief that the market is finally showing signs of recovery AND growth, with clear indications that unemployment is decreasing, this positive upturn comes with a price to the business owner.   

The dental real estate market is expected to go from strength to strength which inevitably will lead to increases in lease rates.  Given the flourishing rental market that currently exists today in San Francisco, landlords would be forgiven for not wanting to keep long-term tenants in place.   A new tenant can mean increasing the rent to match demand.    All factors point to strong demand for commercial space (including dental space) in the Bay area in 2018 and higher lease rates from dental practices.

As with all businesses, a sound, legally binding and advantageous lease contract is vital, but there are considerations, and expenses,  that a dentist surgery has to make that other business owners do not. All leases will consider  the main terms including rental rates, length of contract, renew options, starting date etc. However, in terms of dental office lease rates in San Francisco, some factors have to be considered, which often make the cost of the lease agreement more expensive. Some of the extra factors to consider for dentists looking for dental office space for lease are below:

  • Hours of Operation – necessary if a dentist has an emergency service where patients can be seen out of hours.
  • ADA Compliance – costs involved and who pays
  • Use of Premises – dentist need to have allowance in the lease to enable them to hire other professionals who will enhance the services they offer.

Having said this, the landlord too can benefit from having a dentist as his tenant for some of the following reasons:  

  • Statistically dentists have high credit ratings and low default rates –
  • Given the expense of setting up a dental practice, machinery and space, a normal lease will be from 7-10 years – often going on to 20 years and more.
  • The very nature of a dental practice has clients coming and going all day – giving other business around the benefit of that foot traffic.

Signing a lease contract is a nerve-wracking experience that no one should consider doing alone. Landlords are experienced in dealing with tenants, and most of them know the laws inside out, ensuring any situations are properly handled.

With the expert help of Thomas Mensendiek, you can’t possibly go wrong when making such big decisions and navigating through dental office lease rates. Thomas is a Bay Area native with years of experience in the area’s real estate market.  

If you need someone to help you find the perfect location for your dental practice or medical office space, who will also have strive to find you the best deal – get in touch with Thomas Mensendiek and his team today!