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ICSC Connect Virtual Series: Tips for leasing to medical users

May 14, 2020

Health-care systems will expand farther from their traditional hubs in order to serve people more safely during COVID-19. That’s an opportunity for shopping center owners that have space to lease, experts said on the ICSC Connect Virtual Series called Health Care: Truly Essential in Today’s Tenant Mix.

Major health-care systems are doing everything they can to keep non-COVID-19 patients out of hospitals, said Bill Stinneford, senior vice president for Buxton, a customer analytics company that helps retailers and others find sites based on demographic and other data. “If you look at a typical hospital campus, it means there will be hundreds of thousands of square feet of medical-office space that’s not acute lying dormant. They’re asking, ‘How do we get patients that don’t have a disease like COVID-19 in to see a doctor?’ They’re looking at alternatives, and that’s what makes retail really attractive. That starts the conversation.”

When growing health-care providers learn about the favorable metrics of shopping centers, they’re usually convinced, he said. “They can look at the cost of occupancy being lower in most markets in the U.S. They can look at conversion costs and the benefits of co-tenancy. It’s very early, but health systems are looking at: How do they push out further?”

To better target potential medical tenants, shopping center owners and brokers should parse potential tenants and medical services into boxes, said Chad Pinnell, Midwest health-care solutions managing director for JLL. “If you talk to a retail person, they know what fits into a 1,500-square-foot box, what goes in a 3,000, a 5,000 a 25,000 and a 200,000, so they know who the usual suspects are.” Figure out what a dermatologist likes. What does a practice look like? What does an orthopedic practice want? Who do they want to be close to? Get that organized, and then you’ll know who to solicit and how to attract them.”

For its part, membership-based primary care platform One Medical prefers shopping centers and high streets, said Jamie Goldberg, vice president of real estate and development. “Being away from the traditional health-care locations and the multi-level medical buildings allowed us to continue to treat our patients in a safer and an easier manner than if they had to go into where all that acute care was being given. Being in that setting always allowed for easier access, and COVID has really highlighted that.”

The full ICSC Connect Virtual Series episode is available here (Chrome works best).

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By Brannon Boswell

Executive Editor/SCT