How to Run the Math on Office Space for Mental Health Practices

Julie Herres
23 hours ago
5 min read

A Step-By-Step Guide to Making Your Lease Work for You

Choosing an office space for your mental health practice is a huge decision—and a big, long-term financial commitment. While rent may not be your largest expense, it’s often the least flexible. If you overcommit on space or underutilize your rooms, it can quietly eat away at your profits for years.

At GreenOak Accounting, we’ve seen everything from ultra-efficient city practices (with every room scheduled nearly every waking hour) to beautiful but financially unsustainable “dream offices.” It’s important to remember: you can’t expect every scheduled hour to be filled! In reality, 85% room utilization is a fantastic goal. Here’s how to actually run the numbers—so you can make your space work for you.

1. Figure Out the True Capacity of Your Space

Every room in your office can be scheduled for more than 40 hours per week, but you shouldn’t plan on every single hour being booked. You’ll realistically fill about 85% of your scheduled sessions, allowing for cancellations, no-shows, and downtime.

There are 168 hours in a week (24 × 7). Most practices don’t operate 24/7, but your rooms aren’t “married” to one clinician. You can—and often should—have more than one therapist using the same room at different times, especially in high-rent markets.

Ask yourself:

What are your planned open hours? (e.g., 8am–9pm weekdays + weekends?)
How many therapists will share each room, and what are their typical schedules?
How many “prime time” vs. “off-peak” hours will realistically be filled?

2. Reverse-Engineering the Math: Does This Space Make Sense?

Scenario 1: The Numbers Are Tight

Monthly rent (incl. CAM/utilities): $4,000
Target rent ratio: 4% of gross income
Required gross income: $4,000 ÷ 0.04 = $100,000/month
Average session fee: $120
Required completed sessions per month: $100,000 ÷ $120 = 833
Rooms: 5
Completed sessions per room per month: 833 ÷ 5 = 167
Completed sessions per room per week: 167 ÷ 4 = 42

But remember, with 85% utilization, you need to schedule more than 42 sessions to get 42 completed.

Specifically: Scheduled sessions per room per week: 42 ÷ 0.85 ≈ 50. That’s a LOT!

To consistently complete 42 sessions per week in a room, you’d need to schedule about 50 sessions per week per room. It would take a long time to get this efficient, especially if you are growing into this space. If you’re not already at this level, it might not make sense.

Scenario 2: A More Achievable Target

Monthly rent (incl. CAM/utilities): $2,200
Target rent ratio: 4% of gross income
Required gross income: $2,200 ÷ 0.04 = $55,000/month
Average session fee: $120
Required completed sessions per month: $55,000 ÷ $120 = 458
Rooms: 5
Completed sessions per room per month: 458 ÷ 5 = 92
Completed sessions per room per week: 92 ÷ 4 = 23

With 85% utilization, you’d need to schedule about 23 ÷ 0.85 ≈ 27 sessions per room per week. That’s much more reasonable for most practices, even if you’re not operating at full throttle yet.

This space gives you financial breathing room as you grow.

3. Calculate Maximum and Realistic Usage

Rooms: 6
Open hours per week: 7am–9pm, 7 days = 98 hours/room/week
Initial target utilization: 25% (most practices start at 20-30% utilization and build over time)
Total scheduled hours: 6 × 98 × 0.25 = 147 room-hours scheduled/week
Clinicians: 6-7, each seeing 20–25 clients/week
Average fee per session: $120
Weekly gross income: 147 × $120 = $17,640
Monthly gross income: $17,640 × 4 = $70,560
Monthly rent (incl. CAM/utilities): $4,000
Rent as % of income: $4,000 ÷ $70,560 = 5.6%

You have room to grow and aren’t pressured to achieve ultra-high efficiency right away. If you hire clinicians to fill every open hour and each is about 85% full, your practice could generate even more revenue—but don’t plan your lease around 100% room utilization from day one.

When It Can’t Work:

Gorgeous office: 8 rooms, $20,000/month rent
Open 90 hours/week, but only run 40 hours/room (no evenings/weekends): 8 rooms × 40 hours = 320 sessions/week
Average fee: $120
Weekly income: 320 × $120 = $38,400
Monthly income: $38,400 × 4 weeks = $153,600
Rent as % of income: $20,000 ÷ $153,600 = 13%

But if your completed sessions are 320 at 85% utilization, you’d need to schedule about 320 ÷ 0.85 ≈ 376 sessions/week to hit your financial goals—almost impossible unless every hour is prime time and filled. This lease would eat up too much of your revenue, making it nearly impossible to run profitably.

This space doesn’t make sense.

4. The GreenOak Rule: Reverse-Engineer Your Rent

Always work backward from realistic room utilization—not just your headcount or maximum open hours. Plan your math around about 85% room usage at best. Your goal should be to keep rent (including CAM and utilities) in the 4–7% range of your projected gross monthly income. If you can make it work for less, that’s even better! If your rent is higher, you’ll need truly exceptional efficiency or higher rates, which may not be sustainable. Never base your plans on 100% of scheduled hours being filled—build in margin for no-shows, cancellations, and the natural flow of a busy practice.

Takeaways

Never build your financial model on 100% room utilization—assume 85% is excellent.
Don’t base your math on just “prime time” or a 25- or even 40-hour week—use your rooms smarter and flexibly.
Run multiple scenarios: What happens if utilization drops? If you need to lower your rates? If you want to add more part-timers?
Don’t fall in love with a space until you do the math. Gorgeous doesn’t always mean profitable!
Negotiate for free rent and buildout costs when you can—and always plan for buildout to cost more and take longer than you expect.

Why Work With GreenOak?

We help private practices across the country run the numbers, avoid expensive missteps, and build a space strategy that works for their business. Space isn’t just about compliance or comfort—it’s a foundation for everything else your practice can achieve. A great financial partner helps you analyze, forecast, and plan for sustainable growth, every step of the way.

Thinking about a new space, expansion, or renegotiating your lease? GreenOak Accounting can help you get the math right—so you get the best out of every square foot (and every dollar spent). For more information on partnering with GreenOak schedule a free consultation.

This article is designed to provide information only and should not be considered legal or tax advice. Because of the complexity of the law and the variables in your own personal tax situation, you can’t rely on our advice specifically related to your unique circumstances. In order to get the best tax savings and legal advice available to you, you should consult with your own accountant, attorney, or advisor regarding your particular facts and circumstances.

GreenOak Accounting specializes in working with private practice owners across the United States. For more information on our services, visit our website.