Real estate decisions for dentists in Manhattan?

Maintaining a dental practice in Manhattan presents its own unique challenges. Not only are there a large number of dentists who choose to practice in the heart of the big apple, but we have to deal with the dual issues of relative anonymity and the high cost of real estate.

Relatively few dentists own the real estate their practice is located in. Instead we maintain our offices in commercial buildings that rent us space. Most of our "improvements" belong to our landlord and construction of dental offices in the city are not simple and never cheap, due to a myriad of regulations ( city, coop, and union) regarding construction. Many dentists employ "expeditors" to help insure that construction is completed in a timely manner without any long "holdups".

To make matters more challenging, many landlords are not keen on having dentists lease space since dental offices require extensive plumbing that can cause an occasional flood, when their plumbing springs a leak.

Construction and equipping a small three or four chair office can pose a significant investment for a dentist ($250,000-$500,000 or more), most of which will be lost if he is not able to renew his lease after it reaches its conclusion. 

In my case, every five or ten years I negotiate a new commercial lease for my dental practice and this can pose an interesting challenge.  My three chair dental office  was laid out in 1946 and has a space utilization that allocated too much space to doctor's private offices and the waiting room.  My space is inefficient in its layout, and according to my landlord that's not his concern. Space in my building is currently renting out for $60/sq foot regardless of the condition of the office.

I am currently mulling over my choices, to stay put and do minor decorative changes or move to a smaller space in my building and construct  a smaller three chair office from scratch. It is possible that a brand new smaller office will end up costing me the same in the long run as staying put. My issues are not unique to dentists in Manhattan. Running any small business in New York City is challenging and cost of real estate is a concern for all. The leases we negotiate play a large part in the future viability of our businesses and should require careful consideration.