Building out quality medical offices is far from cheap, but costs don’t have to spiral out of control with the right know-how and team of experts on your side. In 2011, the average cost to build out a medical office in 25 metropolitan markets was over $250 per square foot. As you can imagine, costs have jumped since 2011. The more popular and populated your city, the higher you can expect costs to go. Here are 6 things that’ll influence the cost of a medical office build out and can ultimately save you money.
#1. The Space Impacts the Cost
It’s not uncommon for businesses to underestimate the cost of tenant improvements for medical buildings. The unique needs of your practice will influence total costs, as will the state of the building you are moving into. Is it a warm or cold shell? Do you need to add plumbing, wall off exam rooms, or add lead walls for x-ray units? Depending on what needs to get done, the average medical office build out can range from less than $50 per square foot to over $250 per square foot.
#2. Avoid Personal Guarantees
A Personal Guarantee is great for landlords, who receive the comfort of knowing they’re getting paid even if you default on your rental agreement or your business goes bankrupt. Tenants, on the other hand, do not benefit from these pesky agreements that put all your personal belongings (car, house, retirement fund, etc.) at risk if you default on your lease.
Oftentimes, the landlord will inform you that the personal guarantee is necessary because of the risks associated with the high level of tenant improvements required for medical offices.
If your landlord is persistent about signing a personal guarantee, try to negotiate for lower rent, a sliding scale structure, or something that benefits you. Additionally, if other doctors are going to share the same space, see if the amount of guarantee obligation you are liable for can be split up amongst all parties.
#3. Know the Cost of Building Materials
A General Contractor is tasked with keeping tabs on building material costs and will work with your architect to suggest alternative materials if budgets become an issue. While many medical offices originate with the goal to add top of the line materials, like marble floors or granite countertops, these fancy add-ons don’t always pay off.
The most important aspect of any medical office build out is to improve upon the patient experience, and no matter how pretty marble is, there are a lot of other things your patients are looking at before the floors and countertops. Alternative materials can be used that are far more affordable, look clean and nice, and allow you to focus on what truly matters.
#4. Create a Solid Plan from the Get-Go
Prior to taking down walls or purchasing medical chairs, it’s fundamental that you create a solid plan complete with detailed price estimates, timelines, and so forth. Make the most of every space, including shared spaces such as the waiting room or bathrooms. If you have extra room in the building, consider adding administrative functions to the medical office building, as opposed to the more expensive hospital area.
#5. Just Say No to Crazy Design Prototypes
Unless you’ve got money to burn, there’s no need to waste money on fancy or innovative prototypes for medical offices. Stick to the basic standardized design prototypes. Hospital executives and the design/construction team can work together to add standardized features wherever possible, thus saving you a lot of money.
#6. The Solo Mission Build Out
Trying to complete a medical office build out on your own is going to be full of trial and error, which is ultimately going to get expensive. There are so many interconnected parts, sub-contractors and vendors involved in the build-out process that things can easily get out of hand and budget.
Working with a General Contractor virtually pays for itself, as we take care of everything from bidding projects to hiring sub-contractors, as well as working with the architect to create a solid plan that fits your budget and timeline. Additionally, we host regular meetings with all involved contractors and keep careful records of progress, expenses, etc., identifying and solving issues the moment they arise. Plus, did we mention we have developed working relationships with the best sub-contractors in the industry? As a result, we pass considerable savings directly to you.
Contact us today to learn more about our General Contracting services for commercial interior build-outs.