Commercial Investment Real Estate May/June 2016 | Page 19

the patient privacy restrictions placed on healthcare providers under the Health Insurance Portability and Accounting Act. To avoid HIPAA’s stif civil and criminal enforcement, the medical tenant is right to limit landlord access within those areas where patient records are kept. Typically, the landlord will agree to stay out of any patient f le areas unless accompanied by a tenant representative or if an emergency occurs. These access restrictions also must be explained to contractors who need to access the space during the term of the lease, espe- cially those contractors completing build- out items af er the healthcare tenant opens for business. Need for Flexibility For the business deal between the shopping center landlord and the health system tenant to work ef ectively, relaxing certain retail leasing standards is crucial. For medical of ces, the hours of operation will follow the work schedule of its on-site doctors, dif er- ing from other retail businesses. In return, retail landlords will of en deny co-tenancy rights, which allow for rental reduction based on the vacancy of other space in the shopping mall to medical use tenants. T ey perceive medical tenants as being economi- cally independent of the other businesses at the property. Access to the medical premises is a critical negotiation point. Depending on the nature of its medical use, the tenant may push the land- lord for exceptions to the permitted loading zone hours for ambulances and handicapped patients. Similarly, the number and location of tenant’s reserved parking spaces are a com- mon source of contention. Medical tenants frequently have coop- erative use agreements with other health- care systems. By extension, these tenants negotiate for their cooperating specialists to practice within the premises without obtain- ing the landlord’s consent. Additionally, healthcare tenants will f ght radius restric- tions, limiting the tenant’s ability to open other locations within a specif ed area, and landlords’ attempts to impose percentage rent, which is complicated by the nuances of insurance coverage and Medicaid. Retail landlords will often insist that healthcare tenants coordinate and pay f or their own trash collection, including red bag waste and other hazardous medical mate- rials. T e outcome of lease negotiations on these issues will vary depending upon the context of each particular transaction. Andrew Maguire is a real estate partner at McCausland Keen & Buckman. He negoti- ates leases for a variety of retail landlords and healthcare tenants nationally. Contact him at [email protected]. T is article is for informational purposes only and not for the purpose of providing legal advice and is not to be acted on as such. Have you updated your profle yet? THE NEW FindaCCIM.com Easy to use on any device. Visit your outdated profle before 50,000 potential clients do. Log in to CCIM.com to update your profle. CCIM.com May | June | 2016 