As-Is Condition

When a commercial space is offered on an as-is basis, the tenant or buyer accepts the property in its existing condition — including any defects, deferred maintenance, or infrastructure limitations. For healthcare tenants, leasing or purchasing space as-is carries significant risk because medical and dental offices have highly specific infrastructure requirements that standard commercial spaces may not meet. An as-is lease typically comes with a reduced base rent or an increased TI allowance to offset the tenant's responsibility for bringing the space up to their required standards. Before accepting as-is terms, healthcare operators must conduct thorough due diligence — including mechanical, electrical, and plumbing (MEP) inspections, ADA compliance reviews, and zoning verification. In the Chicago suburban market, as-is opportunities can represent genuine value for well-capitalized practices with experienced healthcare architects and contractors who can accurately scope buildout costs.

As-is spaces can offer below-market rents and creative opportunities for healthcare tenants, but only if the true cost of buildout is accurately assessed upfront. Underestimating as-is renovation costs is one of the most common and costly mistakes in healthcare real estate transactions.

A behavioral health group leases a former bank branch in Downers Grove on an as-is basis at $18/sq ft — well below market — but negotiates a $90/sq ft TI allowance to fund the complete gut renovation required to convert the space into therapy suites and group rooms.