Why Healthcare Providers are Strategic Tenants for Retail Properties
As outpatient care continues to grow, so will the need for healthcare providers to look for strategic clinic placement. Currently the hospital admission rate is 116 per 1,000 people meaning far more people are coming in for regular check-ups to monitor more chronic and less severe health issues. Outpatient services have grown from 22% of total revenue in 1991 to 40% in 2011. What this means for providers is that they need to look for locations where they can provide convenient and quality healthcare to the communities they intend to serve. Healthcare clinic placement strategy will continue to look more and more for smaller infill locations in dense areas that allow them to further penetrate markets and get closer to consumers. Retail projects represent an opportunity for healthcare providers to connect with their customers in environments they are familiar with, are comfortable with, and frequent for their daily needs.
Healthcare providers are strategic tenants for retail properties and represent great opportunities from a landlord perspective as they can stabilize a project by locking in a long-term, anchor lease. This approach is a value add to ownership as they have a user that can take on a second-generation space without needing to tear down the building. In addition to being a good backfill strategy for anchor spaces, medical users provide larger on-site daytime population to compliment the other retail within a project and drive daily needs visits.
In an age where brand recognition and brand reputation are so important towards success, it’s imperative for healthcare providers to differentiate themselves. One example is Carbon Health who Beta recently helped Bentall Kennedy sign a lease with at Midtown Crossing. Carbon Health has found success in bridging the gap between physical and digital healthcare. Not only are their locations conveniently located in daily needs centers, their website allows their customers to book same day appointments and book virtual visits where they can interact with doctors about current symptoms and illnesses. Their pricing is transparent and posted right on their homepage – in person visits are $145 and virtual visits are $45. These virtual visits have the ability to serve a vital role of identifying potentially infectious diseases such as Covid-19. If a patient is feeling ill, they can contact a medical professional at Carbon Health where they can assess whether or not it is dangerous for them to be interacting with others. Carbon Health recently received approval to test for Covid-19 in their clinics as well. The combination of early detection of symptoms via virtual visit and convenient locations for testing may prove vital to slowing the spread of the dangerous virus.
New age healthcare providers are not the only companies embracing a retail centric approach. Retail giants such as Walmart and CVS are among those entering the market as well. Walmart’s Dallas, Georgia location is a one stop shop for all healthcare needs. The facility provides primary care, dental care, vision, psychiatric counseling, and health and wellness programs. Walmart’s Vice President of Health Transformation, Marcus Osborne said, “When you give customer’s options, they will engage more.” CVS says it has plans to renovate 1,500 of their existing locations to provide HealthHUBS to their customers which will dedicate 20% of the store to healthcare services. CVS’s goal is to renovate stores that are located in markets that are underserved in terms of their access to healthcare. What’s truly amazing about the progression of retail healthcare is its ability to act as preventative measure. Customers will now be able to catch a health problem that otherwise could have grown to a life-threatening issue while out shopping for groceries. Retail heath providers will not only bring daily foot traffic to retail projects, it will keep those customers coming back by keeping them healthy.