Lease Negotiations

Getting out of a commercial lease early depends heavily on the exit rights you negotiated when you signed.

The main options are subleasing (renting your space to another tenant while you remain on the hook), assignment (transferring the lease entirely to a new tenant, often when selling your practice), and negotiating an early termination or buyout with the landlord. Each usually requires landlord consent, and the terms of that consent are set by your lease. This is why exit flexibility should be negotiated up front, not when you need it — an assignment right that does not require unreasonable landlord consent protects the value of your practice if you sell. A holdover clause also matters if a transition runs late, since it governs what you pay if you stay past the lease term.

A personal guaranty makes you personally responsible for the lease, meaning the landlord can pursue your personal assets — home, savings, investments — if the practice defaults.

Landlords often require one, especially from newer or single-owner practices, and the exposure can far exceed the value of the business. You rarely have to accept an unlimited guaranty, though. A "good guy" guaranty caps your liability to the period before you properly vacate the space. A burn-off provision releases the guaranty after a track record of on-time payments. A capped guaranty limits liability to a fixed amount. Negotiating the scope and duration of a personal guaranty is as important as negotiating rent — it defines how much personal risk the whole decision carries.

Without an exclusivity clause, nothing stops your landlord from leasing nearby space to a direct competitor — even after you have built your patient base.

An exclusivity clause is lease language in which the landlord agrees not to lease other space in the property, or the development, to competing uses. For practices with expensive buildouts and loyal, location-bound patients — dental, med spa, physical therapy — it is one of the most valuable clauses in the lease. To be effective, it must define the protected services specifically rather than by vague business label, address existing-tenant carve-outs, and include real remedies such as rent reduction or termination if the landlord violates it. Exclusivity is negotiated at the letter of intent stage, while you still have leverage.

A triple net (NNN) lease means you pay base rent plus your proportional share of the building's operating costs — property taxes, insurance, and common area maintenance, known as CAM charges.

CAM covers the upkeep of shared spaces like lobbies, hallways, parking, and restrooms. Because these charges are added on top of base rent, the advertised rate never reflects your true occupancy cost. Each year, the landlord reconciles estimated CAM payments against actual expenses, which can result in an additional bill or a credit. Tenants should always ask for a history of operating expenses, confirm the right to audit the reconciliation, and negotiate a cap on annual increases. Understanding CAM before signing prevents the most common cost surprise in commercial leasing.

A tenant improvement allowance (TI) is a sum the landlord provides to help build out or renovate your leased space, usually expressed as a dollar amount per square foot.

For healthcare and dental tenants, the TI is one of the most valuable and negotiable parts of a lease, because medical buildouts — plumbing, electrical capacity, specialized rooms — are far more expensive than standard office space. How much you can negotiate depends on the length of the lease, the strength of your practice, and the condition of the space. Longer terms and stronger tenants typically unlock larger allowances. The key is to benchmark against comparable medical deals in your submarket rather than accepting a standard office figure, and to negotiate it at the letter of intent stage when your leverage is highest.

When leasing space in Lombard, tenants should confirm that zoning and permitted use align with their specific business model, particularly for healthcare, dental, or regulated services. Parking availability, ADA access, and building infrastructure can significantly impact buildout costs and operational efficiency.

Lease terms should also be reviewed carefully, with attention to renewal options, expansion rights, and exit flexibility. These factors often determine whether a location can support future growth without unnecessary risk.