Most business owners in search of office space have a variety of options — the real challenge is finding the best space to fit operational and financial criteria. That is not the case for providers of behavioral or mental health services. In fact, behavioral health providers are routinely met with roadblocks.
According to the National Institute of Mental Health, approximately 31% of adults and 32% of adolescents suffer from anxiety disorders, and approximately 20% of teens and 60% of adults experience depression. Despite rising rates, Arizona ranks 48th in the U.S. for access to behavioral health care. As the need for mental health care grows, providers face significant challenges securing commercial property leases that will allow them to provide much-needed services.
“In 2021, we began looking for office space to expand the practice. At that time, offices were sitting empty due to COVID, and we would be denied, which was surprising considering they needed tenants,” states Stacey Krauss, Psy.D., CEO of Transitions Counseling and Consulting.
Dr. Krauss learned that property owners were not only resistant to entering a lease agreement with providers offering behavioral health services, they wouldn’t even consider it.
“Sadly, they have a negative perception of mental health service providers. They think it attracts people that will disturb other tenants,” Dr. Krauss explains.
Reality vs. Perception
Most behavioral health providers require private office space ranging from 1,000 to 4,000 square feet. An office suite for a small team of providers may include a reception or lobby, a mix of private offices and group meeting rooms, and a kitchen or lounge for staff. Clients come in for one-on-one appointments or small group meetings and leave, similar to a medical or physical therapy practice but without the need for medical equipment installation or medical waste disposal.
The negative perception is primarily based on concerns about clientele. The expectation is that people will loiter in the parking lot, smoking or using drugs, making noise, imposing danger or demonstrating inappropriate behavior. Another major concern is controlled substances may be stored on the premises.
Overcoming Obstacles
Business owners and tenant reps must educate property owners first. In Dr. Krauss’s case, when met with resistance she and her broker ask property owners about concerns to try and open a dialog and address apprehensions. The following information can help open doors:
- Provide background/history of the company and information about services.
- Share accreditation of the practice and qualifications.
- Invite landlord to tour current offices and introduce to staff.
- Offer tenant records and references.
Typically, a mental health care practice is a quiet office setting that is inviting for patients and offers a safe, comfortable work environment for staff.
“A good location with a safe, well-lit parking lot is important,” explains Dr. Krauss. “We look for a 7 to 10-year lease and an option, in some cases, to increase our space; it’s a long-term relationship that we want to work.”
Transitions Counseling demonstrates why property owners should look beyond stigmas and how tenant agreements with behavioral health service providers can be mutually beneficial.
Christine Juby is a licensed commercial real estate broker and top producer with Davis Commercial AZ. She began her career in commercial real estate in Vancouver, British Columbia, Canada, working in mortgage and investments. After relocating to Arizona, she held positions in property management prior to working as a real estate broker.
