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Retail stores and medical centers: A promising partnership

Medical real estate has been called a recession resistant industry and compared to commercial real estate, is faring better, especially in terms of vacancies. What’s interesting is that as space needs change for physicians, hospitals and health systems, the recession-unoccupied retail real estate has been steadily filling as healthcare providers are repositioning themselves in a more patient focused delivery system.

Partnering commercial and medical real estate as a joint venture is somewhat of a new idea, but a very prosperous one with in-store clinics and community outpatient centers a cost effective healthcare setting.

A case study and best example is Vanderbilt Health which signed a 12 year lease for almost half of the 850,000 square feet at One Hundred Oaks shopping mall in Nashville. Though retail health clinics usually stick to spaces inside chain stores i.e. Walgreens and CVS and even strip malls, shopping centers are a new avenue. In Vanderbilt’s case, the mall provided space that was not just available, but easily scalable and accessible to the Nashville community. This type of venture created opportunities for patients, store owners, and hospital executives alike.

People are also more likely to go to outpatient clinics in shopping areas for minor symptoms than emergency rooms where waiting lines and tensions are high. Parents can drop off their kids at a physician specialist while shopping around in the same vicinity. Vanderbilt’s presence has impacted surrounding stores revenues in some cases in excess of 25%. 

The Mayo Clinic also tried this retail approach when they created the Healthy Living store and health clinic attached to the Mall of America. By offering treatments for the time sensitive customer such as massages, wellness screenings, and recently, organ transplant advice, the Mayo Clinic gives a taste of its services to the 40 million people who shop at the mall annually.  This foot-in-the-door can dramatically increase referrals as follow-up appointments are made as well as enhancing Mayo Clinic brand awareness and reputation.

Currently the process of strategizing and designing space to cohabitate both retailers and health systems is not a facilitated one. It is essential for forward thinking hospitals and health systems to be innovative and flexible as they strive to meet their goals of improved patient care and reduced costs.


James Ellis, CEO, Health Care Realty Development Company, is a real estate investor and developer of medical office properties.


Aaron Razavi is Associate Marketing Director at Health Care Realty Development.



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