It’s no secret that the landscape of the US shopping mall has changed dramatically. Once chock full of every retailer you could imagine for as far as the eye can see, changes in consumer shopping habits have led plenty of those once viable retailers to fall by the wayside – and for others to either reinvent themselves or reexamine space requirements.
That’s led to a conundrum for property owners and landlords looking to maximize occupancy. Experience-type destinations and restaurants continue to gobble up plenty of it, but there’s an underreported segment that’s presented itself as a very viable tenant option. As shared by Philly.com, medical offices continue to snap up plenty of space inside of enclosed malls – and it doesn’t sound like this trend will be slowing down anytime soon.
Garrick Brown, Cushman & Wakefield’s VP of retail research for the Americas, says the number of healthcare providers targeting retail space for expansion or relocations has increased dramatically.
“But movement into malls is a new trend – one that no doubt will grow. The big question is if we may start to see entire health-care campuses moving into struggling malls. This has not happened in large numbers yet, but we do see this as a likely trend ahead,” he said.
The transition is actually pretty smooth in most cases. Quite simply, both parties in the medical office/shopping mall types of transactions like to move quickly, and that can lead to deals getting done in a hurry.
“Health-care providers are looking for quick ramp-up space, thanks to the extra demand on their systems they have seen since the implementation of Obamacare. Urgent-care and triage centers particularly need a lot of space, and retail space fits the bill for many of them,” Brown continued.
Pennsylvania Real Estate Investment Trust has been ahead of the curve on this trend, as CEO Joe Coradino explains.
“This was an opportunity we recognized a few years ago, and while we are selective in its deployment, we know there are synergies between health care and retail, where customers require convenience, access, and comfort,” he said.
Add it all up, and this trend fills a lot of needs. The new locations provide even more options for patients of the healthcare provider, and those patients just may be inclined to spend a little more time at the mall to get some shopping in after appointments, while landlords gain a stable tenant.
“For retail centers, adding health-care uses can offer a convenient new amenity for existing customers in an environment where we are looking to deliver unique offerings, and also bring new customers to our door that are pressed for time and looking to pack some errands in,” Coradino continued.
