Lease Negotiations

Confirm the fundamentals before you sign. In Deerfield, the decision turns on corridor visibility, parking, and the balance of corporate and residential draw. Verify zoning and permitted use for a medical or service use, check real usable parking, and compare total occupancy cost across options, not just base rent. We run these checks as go or no-go questions early.

Confirm the fundamentals before you sign. In Highland Park, the decision turns on location fit, presentation, and limited quality inventory. Verify zoning and permitted use for a medical or service use, check real usable parking, and compare total occupancy cost across options, not just base rent. We run these checks as go or no-go questions early.

Confirm the fundamentals before you sign. In Skokie, the decision turns on corridor fit, co-tenancy near hospitals, and parking. Verify zoning and permitted use for a medical or service use, check real usable parking, and compare total occupancy cost across options, not just base rent. We run these checks as go or no-go questions early.

Confirm the fundamentals before you sign. In Arlington Heights, the decision turns on corridor choice, co-tenancy, and competition for quality space. Verify zoning and permitted use for a medical or service use, check real usable parking, and compare total occupancy cost across options, not just base rent. We run these checks as go or no-go questions early.

Confirm the fundamentals before you sign. In Itasca, the decision turns on regional access, parking, and the surrounding tenant mix. Verify zoning and permitted use for a medical or service use, check real usable parking, and compare total occupancy cost across options, not just base rent. We run these checks as go or no-go questions early.

Confirm the fundamentals before you sign. In Mount Prospect, the decision turns on visibility, parking, and proximity to the residential base. Verify zoning and permitted use for a medical or service use, check real usable parking, and compare total occupancy cost across options, not just base rent. We run these checks as go or no-go questions early.

Anything above the allowance comes out of your pocket, so the allowance is worth negotiating hard.

The tenant improvement allowance rarely covers a full healthcare build-out, and change orders push costs higher. Lock your scope and equipment list before construction, keep a contingency of ten to fifteen percent, and negotiate both the allowance and how it is paid out before you sign.

A landlord can slow your project down, which is why the lease should protect you.

Delays happen when a landlord is slow to approve plans, delivers the space late, or drags out their portion of the work. A well-drafted lease ties your commencement date and rent obligations to the landlord actually delivering on time, so a landlord-caused delay does not become your cost.

It depends entirely on what you negotiate, which is why you settle it before you sign.

Three separate things decide who pays: the work letter splits landlord work from tenant work, the delivery condition sets what the landlord hands you, and the tenant improvement allowance is money the landlord contributes. Blur them together and you can end up covering costs you assumed were the landlord's.

At minimum, negotiate enough free rent (rent abatement) to cover your buildout period, so you are not paying rent on a space you cannot yet use.

Free rent is one of the most common concessions, and for a healthcare tenant it serves a specific purpose: covering the weeks or months when the space is under construction and generating no revenue. How much you can get depends on lease length, your financial strength, and market conditions, but the buildout period is the floor, not the ceiling. Free rent directly lowers your effective rent, so it is often easier to win than a headline rate reduction, because the landlord preserves the number it reports. Confirm whether it applies to base rent only or also to CAM and other charges.

A flat annual escalation of around 3% is common, but the rate matters far more than it looks because it compounds.

A 3% annual escalation on a $30 rate reaches roughly $39 by year ten, a 30% increase built in from day one. A 4% escalation nearly doubles the rent over fifteen years. Some leases tie escalations to an index instead of a flat rate, which can run higher in inflationary periods. When reviewing a proposal, weigh the escalation rate as heavily as the starting rate: a low opening rate with a steep escalation can cost more over the term than a higher rate that stays flatter. Where you can, negotiate a lower rate or a cap.

When you sell a practice, the buyer almost always needs to take over your lease, so your assignment right is central to the sale.

Assignment transfers the lease entirely to the new owner, usually with landlord consent. The hidden risk is a recapture clause: instead of approving the transfer, it can let the landlord terminate the lease and take the space back, then offer the buyer a new lease at a higher market rate. That can complicate or even break the sale, and lower your sale price. This is why exit rights should be negotiated up front, not when you need them. Push for an assignment right that does not require unreasonable consent, and limit or remove any recapture clause at signing.

Only if your lease contains a relocation clause, which gives the landlord the right to move you to a different suite mid-lease, usually to accommodate a larger tenant.

For most businesses this is an inconvenience. For a medical or dental practice it can be serious: your patients know your location, your signage points to it, and your buildout was designed for that specific space. A forced move can mean lost patients, a second buildout cost, and disruption. Resist an unrestricted clause. If the landlord insists, require them to pay all moving and re-buildout costs, guarantee genuinely comparable space, give long advance notice, and cover new signage. Many practices negotiate it out for the early years or the whole term.

The base year is the first year of the lease, whose operating-expense level sets the baseline the landlord agrees to cover.

In every year after, you pay your proportional share of the amount by which expenses rise above that base-year level, while the landlord continues to cover the base. This is common in modified gross and full-service leases. The trap is an artificially low base year: if a landlord sets it in a year with unusually low expenses, your share of increases starts sooner and runs higher. Confirm the base year reflects a normal, fully-assessed year, understand which expense categories are included, and negotiate a cap on how fast your share can grow.

Effective rent is the true average rent you pay over the full term, after concessions like free rent and tenant improvement allowances and after escalations are counted.

To calculate it, add up the base rent for every year of the term (applying the escalation schedule), subtract the value of any free rent and the TI allowance, then divide by the number of years. For the most accurate comparison, discount those figures to present value. Effective rent matters because the headline rate hides both concessions and future increases: a higher quoted rate with strong concessions can have a lower effective rent than a low flat rate. It is the only number that compares two proposals honestly.

Ask for enough to cover most of your buildout, and benchmark against comparable medical deals rather than a standard office number.

Medical and dental buildouts are far more expensive than plain office space, commonly $150 to $350 per square foot in 2026, because of plumbing, electrical capacity, and specialized rooms. Landlord allowances vary with lease length, your financial strength, and shell condition, and a standard office figure will fall well short of a medical fit-out. Longer terms and stronger tenants unlock larger allowances. Get one or two preliminary construction bids before you negotiate, so you know your real number, and settle the allowance at the letter of intent stage where your leverage is highest.

Not necessarily, and this is the single most common mistake tenants make: comparing two spaces by base rent alone.

A $28 per square foot NNN lease adds your share of taxes, insurance, and maintenance on top, often $8 to $12 per square foot, bringing the real cost to $36 to $40. A $36 full-service (gross) lease bundles those costs into one fixed number the landlord absorbs. On the same space, the two structures can be tens of thousands of dollars apart in what you actually pay. The only honest comparison is total occupancy cost over the full term, not the headline rate. Build each offer out to its all-in annual figure before deciding.

In a triple net (NNN) lease, the pass-through charges commonly add $8 to $12 per square foot on top of base rent, and can run 40 to 60% of the quoted base rate.

That means a space quoted at $24 per square foot NNN is really closer to $32 to $36 all-in once you add your pro-rata share of property taxes, building insurance, and common area maintenance. The exact figure depends on the building and the town, and it changes each year through the CAM reconciliation. Because two buildings can quote the same base rate but carry very different pass-throughs, always ask for the current NNN estimate, a history of operating expenses, an audit right, and a cap on annual increases before comparing spaces.

If your landlord defaults on their mortgage and the lender forecloses, your lease can be extinguished — potentially forcing your practice out of a space you spent heavily to build out.

The protection against this is an SNDA (Subordination, Non-Disturbance and Attornment agreement). Its critical component is the non-disturbance clause, in which the lender agrees that as long as you are not in default, you may remain in your space under your existing lease even after a foreclosure. For a practice with an expensive buildout and a location-bound patient base, this is essential protection. It should be requested at lease signing, especially for long-term or build-to-suit space — it is far harder to obtain after the fact and worthless once a foreclosure is already underway.

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.