A medical office lease is typically a 5–10 year commitment with personal guarantees and buildout costs attached. The base rent is the headline number, but the clauses below are where most first-time practice owners get hurt — and most are negotiable if you ask before signing.
1. Use and exclusivity
The "permitted use" clause defines what you are allowed to do in the space. Generic language ("general office use") may not cover medical activities like minor procedures, patient overnight observation, or medical waste generation. Ask for language that explicitly permits your specialty's scope of practice, including telehealth visits, in-office procedures you might add later, and retail sales of medical-related products (eyewear, supplements, etc. — if relevant).
The exclusivity clause is equally important. In a multi-tenant building, you want a written guarantee that the landlord will not lease other space in the building to a direct competitor in your specialty during your term. Without this, nothing stops the landlord from leasing the suite next door to a competing practice six months after you open.
2. Tenant improvement allowance and buildout terms
Medical buildouts are expensive — $50–150+ per square foot depending on specialty. Landlords typically contribute a tenant improvement (TI) allowance to offset this. The clause should specify: the dollar amount per square foot, what it can be spent on (construction only, or soft costs like architect/permitting/equipment), when it is paid (before construction, as reimbursement, or amortized into rent), and what happens to unused allowance (forfeited, credited against rent, or credited to future TI).
Also negotiate who controls the construction: landlord-led buildouts usually cost more and move slower; tenant-led buildouts give you control but shift risk to you. A middle path — tenant-designed, tenant-contracted, with landlord approval and lien protection — is usually the right answer for a medical practice.
3. Operating expenses and CAM pass-throughs
Most medical office leases are "triple net" (NNN) or modified gross, meaning you pay your share of taxes, insurance, and common area maintenance (CAM) on top of base rent. The risk: open-ended CAM clauses let the landlord pass through nearly any expense they want.
Push for a CAM clause that excludes: capital improvements (unless amortized over useful life), landlord overhead and administrative markups above a capped percentage, legal fees for disputes with other tenants, leasing commissions, and any costs specific to another tenant's space. Ask for an annual CAM cap (e.g., CAM increases limited to 5% per year, cumulative or non-cumulative) and the right to audit landlord's CAM calculations annually. Without these, CAM creep can double your effective rent over a 10-year term.
4. Assignment, subletting, and change of control
If you want to sell your practice, merge, add a partner, or form a new holding entity in five years, the assignment clause determines how much friction that creates. Default landlord language requires landlord consent (often at landlord's "sole discretion") and gives the landlord a termination/recapture right if you try to assign.
Negotiate for: consent "not to be unreasonably withheld, conditioned, or delayed"; explicit permission to assign to an affiliate, successor entity, or a buyer who purchases substantially all of your practice's assets; and no recapture right so the landlord cannot terminate the lease instead of approving your buyer. This clause is boring to negotiate in year one and worth a six-figure difference in year eight when you try to sell.
5. Personal guarantee and good guy clause
Almost every new-practice lease requires a personal guarantee. The question is how broad and how long. A full guarantee means you are personally on the hook for the entire remaining term if the practice fails. A "good guy clause" is the middle path: you remain personally liable only for rent owed up to the date you vacate and deliver the premises back in the required condition, typically requiring 60–120 days' written notice.
Ask for either: a good guy clause in place of full personal guarantee, or a personal guarantee that burns off (caps at 12–24 months of rent, or terminates entirely after you hit a defined revenue or net-worth threshold, or after 36 months of on-time payment). Landlords push back on this but commonly agree, especially with physician tenants whose default rates are extremely low.
6. Relocation clause
Many multi-tenant medical leases contain a landlord's right to relocate you within the building for the landlord's convenience (typically "to accommodate another tenant"). For a medical practice this is catastrophic: patients memorize your suite location, signage is specialty-specific, and buildout was designed around specific plumbing and electrical. A forced relocation can cost you months of productivity and tens of thousands in buildout.
The fix: strike the relocation clause entirely, or at minimum require landlord to pay all relocation and build-out costs, relocate only to a comparably-sized and comparably-visible space on the same floor, give 120+ days' notice, and let you terminate the lease without penalty if the substitute space is unacceptable.
7. Holdover and renewal options
The end of the term matters as much as the middle. Holdover rent (what you pay if you stay past the term without a new lease) often defaults to 150–200% of the last month's rent — a costly incentive to negotiate renewal early. Renewal options give you the right, but not the obligation, to extend at a pre-specified rate or formula.
Negotiate two things: a reasonable holdover rate (110–125% of the last month's rent rather than 150–200%), and at least one 5-year renewal option at a defined rent formula (e.g., fair market value, with a cap on increase tied to CPI or a fixed percentage). Without a renewal option, you renegotiate from zero at the end of the term — and the landlord knows your patients, signage, and buildout are all stuck in this suite.