UO Magazine > Real Estate > Renovate Your Space

By Marilyn Haddrill

When Joseph Mele III, MD, learned that the building where he leased space was about to be demolished to accommodate a nearby hospital expansion, he needed to find another location for his Walnut Creek, California, medical practice.

“In this town, there are no empty lots,” Mele says. “You either buy something, tear it down, and start over. Or, you remodel.”

Because he had a few years’ notice, Mele was able to scout potential new locations. But it actually took him that long to find a suitable place. In December 2006, he relocated his practice to what had been a neurologist’s office about a block away.

Mele bought into a partnership entitling him to shares in the property, which gave him ownership status that helps protect him from any future uncertainties inherent in leasing. However, it’s not the same business arrangement as a “condo” style purchase, where you outright own the specific area you occupy.

“If you buy into a partnership, you can sell your shares. But it’s not as liquid as a condo,” Mele says.

Even though the new site had been occupied by another medical practice, Mele needed to remodel

the structure because his specialty of cosmetic surgery required more space. “My advice would be to start making plans sooner rather than later if you do have plans to move,” Mele says. “Finding the right place takes a lot more time than you would ever think. Even if you aren’t planning on moving, maybe you should get out every now and then and take a look around anyway.”

Once it’s time to relocate or set up a new practice, Mele says, physicians should resist any do-it-yourself urges when it comes to remodeling. Instead, seek out appropriate specialists. Mele used a real estate broker to help him find the new site, and he met with a color consultant to assist with interior design.

Although he did use specialists, Mele himself was no stranger to what was needed for a remodeling project. His father was a contractor. And Mele’s own contractor for the remodeling project was his brother-in-law. “It’s very important to have good communication with whoever is doing the remodel,” Mele says. “It was mostly a matter of making sure that I had enough space for what I wanted to do, while at the same time complying with all the regulations. Phone systems are always a pain, and that was probably the biggest problem with the entire move.”

Transitioning from the previous location to the new address was particularly problematic for Mele. As a surgeon, he must be available at all hours for calls from patients who might be undergoing a complication. It was essential for phone lines to be operational, even during the weekend, for emergencies. Unexpected delays and glitches with setting up the new phone system occurred, so Mele ultimately gave out his personal cell phone number to make sure patients had uninterrupted access to medical care.

Because it’s imperative that medical practices operate continuously, some experts suggest starting a remodeling project during an “off time” for construction, such as winter months when contractors and subcontractors are more likely to be available. That way, delays from scheduling conflicts are less likely to occur.

Project timelines vary, often depending on how well thought-out plans are in advance. Architects and business partners Lane Allen and Eric Pepa, based in Batavia and Elgin, Illinois, near Chicago, specialize in new construction and remodeling for medical practices. Allen and Pepa say typical timelines can range from conservative to streamlined, depending on how organized and motivated a customer might be.

Time schedules for a typical interior remodel might be:

• Approximately one month to select an architect.

• Six weeks to three months to prepare bid and permit documents.

• Three weeks to several months for the actual bidding and permit process.

• Two to four months for renovation (barring unforeseen circumstances).

The cost of a project is a big factor in how long it will take, and this can be determined only after a detailed plan is drawn up, including exactly what you want to accomplish and the type of materials you want used. Even then, the unexpected can occur during a remodel and drive up costs. While cost estimates per square foot are common for new construction, coming up with a similar pricing scheme for a remodel is virtually impossible. Contractors like to use the analogy of attempting to price a car by how much it weighs. A new luxury car might weigh the same as a rusted out junker, but there’s all the difference in the world in the value of each vehicle.

If you plan a major project, it’s always best to trust the experts both to avoid unexpected—and expensive—problems, and to make sure you’re dealing with someone who can effectively anticipate, estimate, and manage costs once you have a well thought-out plan. Architects Allen and Pepa suggest using these types of experts for major remodeling projects:

• Under direction of an architect, you may need engineers specializing in structural, mechanical, electrical, plumbing, and permitting and bidding aspects of the project.

• The design and building contractor generally handles landscaping, but you may want to use a landscaping architect if local government approvals are required.

• The architect in a major project usually oversees interior design, including furniture, carpeting, and other floor finishings.

• Depending on specific needs of the medical practice, you may (for example) need an expert in x-ray rooms and required government approvals for how this type of room should be structured for containment of radioactive particles. (Allen and Pepa, along with the contractor, use subcontractors for this aspect of projects.)

“One trend we’ve noticed in recent years is a transition from facilities being leased to being purchased by doctors,” Allen says. “That changes how they build out their space and how they think about it. The property becomes part of their capital investment as opposed to just an expense.”

Because ownership represents far more of a financial commitment than leasing, Pepa says infrastructure requirements for medical practices should be carefully considered in advance of purchase:

• Will you require a free-standing building, or will your practice fit nicely into general office space?

• Will you own the entire building, or only a portion of the building?

• Would your interests best be served by moving into a one-story strip center with a common parking lot shared with other businesses?

“One of the problems with a medical facility is that it typically requires more parking density than other types of uses,” Pepa says. “Whereas a typical office space will require parking for four cars per 1,000 square feet, a medical practice typically will require five or even six parking spots for the same space. In older downtowns, you’re not going to find an excess of parking. That’s not to say relocating to an older downtown area shouldn’t be done, but parking is something that should be taken into consideration.”

Pepa says downtown districts with older buildings also can cause patient accessibility issues in terms of need for appropriate wheelchair ramps, door width, restroom space, grab bars, and similar considerations. Such difficulties can be addressed, however, with the proper planning.

“The operative word is accessibility,” Allen says. “Accessibility doesn’t mean being able to get a wheelchair from here to there. There’s a fluidity of movement needed from one place to another.”

Allen and Pepa say medical practices also have advantages over other types of businesses in that their location does not necessarily have to “catch the eye” of the patient driving by or be in a high traffic or high profile area. That’s because the doctor-patient relationship usually is established in other ways, such as from a phone call or word-of-mouth from other patients.

“People don’t go to a physician on an impulse,” Pepa says. “So a doctor’s office doesn’t have to be on a primary thoroughfare, because traffic can be a real issue. After the first visit, people know where their doctor is, and they’ll find the doctor when they need to.”