WASHINGTON, DC—Perhaps Mike Norris picked up the habit from his physician tenant clients or perhaps he just naturally scrutinizes every report, every number, every fact for something that looks off. Either way the result is the same: Norris is often able to met his self-proclaimed goal of shaving 20% to 30% off of a client's real estate costs.

A fifteen-year industry veteran, Norris is a health-care tenant rep at Ezra Co., one of the few local brokers that specialize in this category. This year he has completed more than a dozen transactions totaling 150,000 square feet for health-care clients.

To be sure, the health-care space is a little different both from a landlord and tenant perspective. For example, when negotiating a renewal Norris takes the extra trouble to educate his clients on their value as an existing tenant to the landlord. Oftentimes physicians are unaware they have this bit of leverage, he says.

Other than that, however, a lease is a lease is a lease, to horribly paraphrase a certain avant garde writer and it is interesting to hear how Norris is able to sniff out the savings for his clients.

Some excerpts from our conversation:

Measure the space. All of it. Norris says he measures every bit of space the tenant is paying for, including the common areas. He often finds discrepancies in the tenant's favor. "In one initial analysis for a practice, we found the landlord was double counting a portion of common area," he said. "The client was midway through a ten-year lease so it was able to recover the extra payments it made and reset the rent. The aggregate savings came to $40,000."

Double check operating expenses. Discrepancies crop up here too, Norris said. "Maybe the landlord is charging more than the market rate or the pro rata share has been incorrectly calculated or the landlord is charging for an expense that was excluded in the negotiations and lease."

Who is taking care of code compliance? Always make sure the lease specifies the landlord is responsible for code compliance, Norris said. In some jurisdictions bringing common area bathrooms up to code can be potentially 20% of a build out budget, he warns, and if there is a major build out underway, some landlords may take the position that the construction was the reason for the code violations and therefore the tenant is responsible.

(Read about the new standards for lighting switches and fixtures that tenants must make sure to address in the TI or lease here).

Think about top line growth. Too often real estate is viewed as just a commodity and tenants don't think about how it can be used to drive more growth, Norris said. As an example, he points to the Family Medicine of Clifton/Centreville, a part of the Fairfax Family Practice Centers in Northern Virginia. Norris recently renegotiated its existing lease of about 15,000 square feet so that FMCC could expand its physical-therapy rooms.

"It's more than just about saving costs; you have to think about how the client can deliver health care in a more efficient way," Norris says.

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Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.