Medical tenants are just what the retail doctor ordered
Approximately 20% of leased medical space in retail buildings: CoStar
The doctor will see you now — but your appointment might not be where you expect.
Landlords are filling more vacant retail spaces with medical tenants such as doctors and dentists, the New York Times reported. The rise of “medtail” comes as tenants take advantage of lower rents, while landlords fill malls, shopping centers and storefronts, prompting increased foot traffic.
Where landlords once worried about the optics of sick people walking through malls to get to doctors’ appointments, medical offices are emerging as long-term answers at vacant retail properties.
“As the landlord thinks about what will happen if we ever go through a crisis again, they want things that won’t close — grocery stores, pharmacies and medical facilities,” Barrie Scardina, a retail expert for Cushman & Wakefield, told the Times.
Approximately 20 percent of leased medical space is located in retail buildings, up from 16 percent in 2010, according to data from the CoStar Group. Ellen Dunham-Jones, a Georgia Tech professor tracking the pivots of malls, told the Times that 32 enclosed malls in America have dedicated substantial space to medical providers.
In Manhattan, the emerging class of tenants has presented a potential answer for vacant storefronts in struggling retail districts.
Empire State Realty Trust is targeting medical tenants for its 44,000-square-foot retail condo at the base of 1010 Third Avenue, The Real Deal reported last month. Cohen Brothers Realty, meanwhile, recently secured medtail tenants for half of a 40,000-square-foot space once occupied by a Borders bookstore at the Ritz Tower at 111 East 57th Street.
“Medtail is incredible,” Ever/Body CEO Amy Shecter previously told TRD. “It is making all different types of medical practices accessible to more people.”
Consumers appear to be welcoming the trend. By early 2020, nearly 7 in 10 adults visited a health care provider in a shopping center, enclosed mall or strip mall, according to an ICSC survey reported by the Times.
While the turn to medtail is still growing, the trend has its obstacles. Some spaces require boosts to plumbing and power capabilities, as well as an improved HVAC system. Many properties located in malls also lack natural light, which can turn away some prospective customers.
[NYT] — Holden Walter-Warner