Searching for Medical Office Space in NYC.....
Yes, New York City is where I live and practice, and as you may imagine, office space comes at a premium. Finding office space that is affordable is a challenge. Finding office space, period, is a challenge! But like I've said before, no matter where you're at, if you can purchase an office space you're steps ahead of the game. Just think about it, owning your own space means locking in mortgage payments that are predictable and will not increase for the next 15 years, unlike rent under a lease. Of course, you can start small and just rent a room in a space, but eventually you will need to grow. Yes, I know you could have a micropractice and limit your practice size to a certain number of patients. I'm all for that, but there's no replacement for being the master of your own domain, where you can add your personality, likes and tastes.
New York City is a jungle with many players and dealers. You have to develop a sense for real estate brokers that you can trust, and ones that you cannot. Now given that they're all invested in a commission they're making from the lease or sale, old-school me says take everything they say with a grain of salt. In fact, my experiences thus far have taught me to "trust, but verify" as my father used to say. You're never completely sure who you can trust. Personally, there's only a few people I trust -- my accountant and lawyer are up there, but definitely not my broker, as great as they may be. Such is the name of the game.
So through trial and error you go on the search. Myself, I trust my gut more than anything. If I'm not completely feeling a space, I won't commit. I've been looking for a space to move to for almost 2 years now. Moving a medical practice is a big deal. You have several considerations: 1) Location -- will my patients follow me, 2) Location -- is it convenient to the hospital (hopefully not -- I hate the hospital), 3) Size -- what size space do I need, 4) Size -- will I be alone or sublease to someone else (btw, the smart thing to do, especially for you pcp's and family doc's out there -- face it, we're not making enough money), and 5) Location -- how long will my commute be. These are all very important questions.
Next: 1) Is the space built out as medical? 2) Is the space zoned for medical use? (turns out a very important consideration in a zone-crazy city like Manhattan; if not, rezoning is a nightmare) 2) Is there water in the space? If not, you'll need to find the nearest pipes and figure out if they can be run into the space? 3) Do you need to knock down walls or build walls? 4) Is there a bathroom? Do you honestly want your patients running down the hall with a urine cup in their hand? 5) Does the layout allow you to build the right flow for your practice?
This is when you might hire an architect to take a casual look at the space. I advise against paying at this point. Just get them to give you an idea if the job is doable. Once the lease or sale is closed, you'll need to get a jump on this, as you may have to submit the plans to get a work-permit from the building department. New York City's has a special name -- "the Department of Aggravation." Since plans may take a while to get approved, then you may need to hire an "Expeditor." Sounds "Terminator-like," doesn't it? These people are highly skilled individuals specialized in the art of getting your plans through the building department and approved in a matter of days, instead of weeks. Amazing, huh? Isn't it great what bureaucracy has created?
Once you have a plan, you need a contractor. GOOD LUCK! Hahaha! Yes, this may be quite a difficult task. Remember what I told you in the beginning about trust and honesty. Don't trust these!!! They will promise you the sun and the moon, but in the end may only deliver a raisin. They may quote you 25K now, but by the end it's 50K. Always hidden surprises! Check their references! Then check them again! Ask to see samples of their previous work. The research invested before the job begins, will save you tons of aggravation later. Remember, the day your lease or sale closes is not the day you move in, unless you've have found that once in a blue-moon space that is in move-in condition. Not in NYC where space is scarce, and demand is high. If you live where I live, you'll probably have to do some work to the space. Maybe even a lot of work if the people who left it never made any improvements, unless you like working in a time-capsule.
Aahh, finally....... moving day! Everything is done! Right? Wrong, did you forget to tell each insurance plan you belong to about the impending move? It may take these wonderfully bureaucratic entities a month to enter your new address in the system -- God knows changing a few letters in a computer is a difficult task. Then, it will probably take them another month to start sending your mail there. Did you not tell them to change the mail-to address as well? Those checks are important, so either change to direct deposit before you move, or make sure to give the insurance plans plenty of notice. Tell all of your referring docs as well. Then forward your mail anyway.
And the Best Part! Throw an Opening Reception party! Invite all of your doctors friends and potential sources of referrals to gawk at how great your new space looks. All your hard work has paid off. It's time to celebrate and begin building your future!
Please remember -- don't make it another boring doctor's office. Hang up some artwork for God's sake!
New York City is a jungle with many players and dealers. You have to develop a sense for real estate brokers that you can trust, and ones that you cannot. Now given that they're all invested in a commission they're making from the lease or sale, old-school me says take everything they say with a grain of salt. In fact, my experiences thus far have taught me to "trust, but verify" as my father used to say. You're never completely sure who you can trust. Personally, there's only a few people I trust -- my accountant and lawyer are up there, but definitely not my broker, as great as they may be. Such is the name of the game.
So through trial and error you go on the search. Myself, I trust my gut more than anything. If I'm not completely feeling a space, I won't commit. I've been looking for a space to move to for almost 2 years now. Moving a medical practice is a big deal. You have several considerations: 1) Location -- will my patients follow me, 2) Location -- is it convenient to the hospital (hopefully not -- I hate the hospital), 3) Size -- what size space do I need, 4) Size -- will I be alone or sublease to someone else (btw, the smart thing to do, especially for you pcp's and family doc's out there -- face it, we're not making enough money), and 5) Location -- how long will my commute be. These are all very important questions.
Next: 1) Is the space built out as medical? 2) Is the space zoned for medical use? (turns out a very important consideration in a zone-crazy city like Manhattan; if not, rezoning is a nightmare) 2) Is there water in the space? If not, you'll need to find the nearest pipes and figure out if they can be run into the space? 3) Do you need to knock down walls or build walls? 4) Is there a bathroom? Do you honestly want your patients running down the hall with a urine cup in their hand? 5) Does the layout allow you to build the right flow for your practice?
This is when you might hire an architect to take a casual look at the space. I advise against paying at this point. Just get them to give you an idea if the job is doable. Once the lease or sale is closed, you'll need to get a jump on this, as you may have to submit the plans to get a work-permit from the building department. New York City's has a special name -- "the Department of Aggravation." Since plans may take a while to get approved, then you may need to hire an "Expeditor." Sounds "Terminator-like," doesn't it? These people are highly skilled individuals specialized in the art of getting your plans through the building department and approved in a matter of days, instead of weeks. Amazing, huh? Isn't it great what bureaucracy has created?
Once you have a plan, you need a contractor. GOOD LUCK! Hahaha! Yes, this may be quite a difficult task. Remember what I told you in the beginning about trust and honesty. Don't trust these!!! They will promise you the sun and the moon, but in the end may only deliver a raisin. They may quote you 25K now, but by the end it's 50K. Always hidden surprises! Check their references! Then check them again! Ask to see samples of their previous work. The research invested before the job begins, will save you tons of aggravation later. Remember, the day your lease or sale closes is not the day you move in, unless you've have found that once in a blue-moon space that is in move-in condition. Not in NYC where space is scarce, and demand is high. If you live where I live, you'll probably have to do some work to the space. Maybe even a lot of work if the people who left it never made any improvements, unless you like working in a time-capsule.
Aahh, finally....... moving day! Everything is done! Right? Wrong, did you forget to tell each insurance plan you belong to about the impending move? It may take these wonderfully bureaucratic entities a month to enter your new address in the system -- God knows changing a few letters in a computer is a difficult task. Then, it will probably take them another month to start sending your mail there. Did you not tell them to change the mail-to address as well? Those checks are important, so either change to direct deposit before you move, or make sure to give the insurance plans plenty of notice. Tell all of your referring docs as well. Then forward your mail anyway.
And the Best Part! Throw an Opening Reception party! Invite all of your doctors friends and potential sources of referrals to gawk at how great your new space looks. All your hard work has paid off. It's time to celebrate and begin building your future!
Please remember -- don't make it another boring doctor's office. Hang up some artwork for God's sake!
posted by Medicine Man at 11:35:00 PM
8 Comments:
I lucked out and found a space that had been a doctor's office for 30 years. No major build-out needed. As you know, build-outs ain't cheap and it could take years to re-coup the costs.
You had great luck, my friend. Build-outs aren't cheap, but there are ways to lower costs. There's got to be a tax deduction somewhere in there. I'll have to ask my accountant about depreciation or something. I know that 50% of the expense of any improvements that enhance the handicap accessibility of the space are tax deductible.
Question aboyut location. How important is it to be 1) around other doctors, 2) nearby a hospital.
I want to setup my office in the center of a residential area or a area where there are many professionals - but no doctors. But I worry that this isn't where all teh MDs are. Do they know something I don't?
How about in a retail are that hasa CVS and high end boutiques.
conciergedoc,
would love to know how it goes with you? Concierge medicine or some form of it is the way to go. Unfortunately, the insurance environment in this country is only going to create more stratification, because at some point doctors are going to get fed up.
As for location. How dependent are you on other doctors for referrals, if at all? in a residential area, you may have trouble getting people in during regular working hours. How much work do you do in the hospital? Do you need to be near for convenience? Retail area with foot traffic sounds better, or even a financial area in your city. It's a tough call, and depends on how far you are from your potential patients. You want to be easily reachable by your patients, so that means having an understanding of your city and where people are willing to travel, or also whether it is a neighborhood that is lacking doctors, so it would set you aside from the competition. We need more information about what you're considering.
As a developer specializing in hospital-centric medical office space in NYC, I can sympathize with the difficulty of finding space. It seems most physicians end up on the ground floor of apartment buildings, usually in shabby space.
Since most patients have no basis for judging your actual competency, the "halo" effect of the building you are in could well affect the patient's perception of the quality of your services---after all, if you can't afford decent space, then your services must not be in demand, therefore, you must not be any good---get the drift?
I suggest there may be a fallacy in your emphasis on minimizing cost, versus maximizing revenue, depending on your specialty. If the base building is specifically designed for medical use it can result in a very space-efficient layout so that a high per-square foot rent of say $80 for new space is not effectively double, in the aggregate, the $40 that crap space goes for. Further, if the property has scale [e.g., 100K SF], the specialty mix can be programmed to create an internal referral cycle that boosts income.
Scale also permits shared services and amenities such as food, concierge, data support, etc. The location should be near a hospital so you can walk there and not ride [i.e., see more patients] and feed off the "halo" of a hospital's institutional credibility. Retail locations are for spider bites.
The entire building should be focused on saving you time, allowing more patient visits and making your practices more productive. Also, typically physicians will have partnership interests in the property as well.
And, the building image, through design, can connote the "state-of-the-art" medical care that New Yorkers are seeking. After all, why do you think they schlep up to Washington Heights?
The hardest part of developing this space in NYC is recruiting the physicians. They are mostly "onesies and twosies"---few groups, unlike the rest of the country. If you could create a large cooperate group of physicians with the express goal of sharing a building, then you would have tremendous leverage over the landlord/developers who currently walk all over you. You would also control your own destiny and get space that works to enhance your practices.
I don't think this is going to happen---cooperation is unlikely.
Dear anonymous,
my take is that conciergedoc, myself (even though I'm not currently concierge), and the independent urologist are trying to create practices that cater to patients that want high-quality care. Unfortunately, when business minds (as yourself, not that I'm criticizing, it's just a different way of looking at things) get involved, you stop thinking about people as persons, and more like numbers -- volume. Build big. Shuffle them through. Create mass-market medicine. That style of medicine may be what works for you, but not for us. That's why we left our group practices to start our own solo practices, because the larger the group the more corporate the medicine becomes.
The numbers matter, or I wouldn't be griping about space woes, but also keeping to the reason I'm here for my patients, which is to serve them, not the insurance companies, and certainly not others that may be clocking in my hours telling me my volume is not high enough = work faster, faster. We're trying to get out of the medical rat race, not re-create it.
Recently, a multispecialty group in Manhattan was disbanded because the doctors could not agree on how overhead expenses would be shared. In fact, the group was in financial jeopardy. It's ridden with problems that I don't want to have. We left bureaucracy behind for a reason.
Now as far as good space goes, I've found excellent space at $55 in Manhattan. And last I checked 80 is double 40. You're a developer, and your mind is on maximizing your profit at whatever way you can justify it. My goal is to simplify. And if I can find a great location, at a more affordable price, that's what I'll take, even if it's not some brand-spanking new overpriced building.
I'M JUST TRYING TO FIND A GROUND FLOOR DOCTOR WHO IS DOWN SIZING AND WANTS TO SUB-LEASE, IF HE/SHE HAS X-RAY THAT WOULD BE A PLUS, BEEN LOOKING FOR A WHILE. DR P. 646 358 5608
There are many entrepreneurs out there who are quite good at what they do, but often my hat goes off to the solo practitioner who is making it all come together. Why you ask? Well simple really; being a Solo Practitioner at anything well that is not easy. Why do people go solo?
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