Lease negotiation
Negotiating a medical lease renewal
Health MediCo™ Advisory · 21 July 2026 · 7 min read
Renewals are where most healthcare tenants quietly lose money. The lease rolls over on the landlord's terms because the option deadline arrived before the practice had done any preparation. The fix is process, not confrontation.
Start with the lease, not the landlord
Before any conversation, extract every critical date, the rent review mechanism, the option exercise window, outgoings definitions and the make-good clause. These determine what is actually negotiable and when.
Rent review mechanisms matter enormously. A fixed 4 per cent annual increase compounding over a five-year term can push a tenancy well above market by year four, and that gap is the strongest argument you have at renewal.
- Confirm the option window — missing it forfeits your position entirely
- Read the outgoings definition, not just the rent clause
- Quantify make-good exposure before you disclose your intentions
Build the evidence file
Landlords negotiate against comparable deals. So should you. Assemble recent transactions for similar medical space in the area — effective rents, incentives, term lengths and fit-out contributions.
Where comparable evidence is thin, occupancy cost benchmarking against similar practices provides a defensible alternative anchor.
Preserve a credible alternative
The moment a landlord believes relocation is impossible, negotiation ends. Running a genuine market search in parallel — even where staying is the likely outcome — keeps the alternative real and the terms honest.
- Shortlist two viable alternative premises before opening talks
- Keep patient-communication and relocation cost estimates ready
- Negotiate incentives, term and make-good as one package, not sequentially
Key takeaways
- Your lease document sets the boundaries of every negotiation
- Comparable evidence beats argument every time
- A credible alternative is worth more than any negotiating tactic