Health care tenants gobble up LI retail spaces

On Long Island, the doctor will see you now, virtually wherever you look.

Health care tenants have spiked in mall and shopping center retail spaces, Newsday reported. Where department stores and apparel chains once reigned, doctors and nurses are instead seeing patients and tending to the sick.

The increase in health care tenants in the region has been nothing short of a shot in the arm of Long Island’s retail scene. The total square footage of malls and shopping centers on Long Island grew by 5.8 percent from 2012 to 2022, according to CoStar. In that same period, the amount of that space occupied by health care tenants grew a staggering 1,313 percent, from 88,000 square feet to more than 1.2 million square feet.

In 2012, Northwell Health occupied the most Long Island retail space at 37,000 square feet. CityMD was the only other tenant to tip past 10,000 square feet, but not by much.

Last year, no health care tenant occupied more space on Long Island than CityMD with 177,000 square feet. Northwell Health dropped down to third, but still increased its portfolio to 146,000 square feet. Three tenants occupied at least 100,000 square feet, while seven occupied at least 50,000 square feet.

The spaces hold their fair share of perks for medical tenants and retail landlords alike. For tenants, it’s cheaper to move into existing spaces even if they need to make improvements to equip the space for medical use. They also might be able to score concessions from landlords who fear the disappearance of its more traditional retail occupants.

For landlords, they reel in a tenant that is more likely than brick-and-mortar retail tenants to stick long-term. These tenants also tend to pay beyond regular allowances to renovate spaces and their long-term presence could entitle some landlords to property tax savings.

A prescient example has unfolded at 1440 Northern Boulevard in Manhasset, where Hudson’s Bay and WeWork were poised to turn a former Lord & Taylor space into a SaksWork co-working space. However, that plan has since been pushed aside by NYU Langone Health, which signed a 30-year lease to take the entire 162,000-square-foot, three-story building for a wide variety of needs.

— Holden Walter-Warner