Recent commercial real estate trends indicate that brick and mortar retail spaces are poised for some significant changes. The most noticeable and impactful of these changes is the introduction of “medtails”. A medtail is a healthcare facility located in a retail shopping center or mall.
Why Medtails?
Much like the retail industry, healthcare underwent significant changes over the last several years. Healthcare franchising, medical reform, and clinician shortages inspired healthcare executives to start viewing their customers more similarly to the way retailers do. This new outlook on healthcare consumers has prompted healthcare facilities to buy up or lease real estate in shopping centers at a rapid rate.
How Popular Are Medtails?
Medtails are popping up in shopping centers across the U.S. For example, Patriot Place in Foxborough, MA has several medtail tenants including Brigham Health And Brigham And Women’s / Mass General Health Care Centers. In 2019, Mall of America, the largest mall in the nation, announced plans to open a 2,300-square-foot walk-in clinic offering medical exams, and pharmacy services. And in 2012, Nashville’s One Hundred Oaks Mall partnered with Vanderbilt Health to turn the retail center into a successful, mixed-use medical office destination that brings convenient, top-tier medical care to the Nashville suburbs.
These are just a few of the many medtails that have already established significant inroads and staying power in shopping centers across the country. According to Drew Myers, a real estate analyst at CoStar Group, mall leases for clothing retailers declined by more than 10% since 2017. But, medical clinics at malls have risen by almost 60% in that time.
Benefits to Healthcare Providers
A Competitive Advantage: Healthcare systems recognize that they need to increase their market share to compete. One of the best ways to get their services in front of more people is to open satellite expansions in places like Retail Centers where foot traffic is high.
Create More Space: Moving services from a hospital’s campus to a nearby mall frees up valuable square footage in crowded hospitals. Additionally, doing construction at a hospital is much more expensive and time-consuming than doing so in a retail center. Further, retail centers typically have access to significant parking spaces, most of which are often free. So, building a medtail makes perfect logistical and financial sense.
Benefits to Property Owners and Rental Agents
According to JLL, medtails are an ideal tenant because they typically:
Are low risk: Medtails often have higher credit ratings than other the average retail property renter. This makes them a low-risk tenant for the owner.
Sign Longer Leases: Medtails have shown a tendency to favor longer contracts compared to other retail brands, which tend to shy away from them.
Stay at one location: Medtail is more likely than other retail renters to resign a lease and stay at one location for an extended period of time. The high cost of setting up shop makes medtails much more likely to stay.
Generate Revenue: Most importantly, the overall revenue generated by healthcare clinics of every size and scope and across every specialty makes medtails an excellent investment option. According to the Centers for Medicare & Medicaid Services, healthcare expenditures are predicted to grow by over 70 percent, reaching $6 trillion by the year 2027. As a result, property owners understand that having a medtail at their shopping center will help them meet their sales and revenue goals.
Are you looking for up-to-date, comprehensive data on major shopping centers located across North America to find a suitable location for a medtail?
The Directory of Major Malls has detailed information on more than 8,500 shopping centers in the USA and Canada. Of those 8,500 shopping centers, over 2,500 are home to health and wellness tenants, including pharmacies, dental offices, urgent care facilities, and more.
Find out how the Directory of Major Malls can accurately inform your retail location planning and strategy team today.
