To Fill Empty Retail Space, Landlords Tap Doctors and Dentists

For landlords hit hard by store closures during the pandemic, well-funded healthcare providers, who tend to sign long-term leases, are suddenly desirable.

“As landlords think about what will happen if we ever go through a crisis again, they want things to stay open – grocery stores, pharmacies and healthcare facilities,” said Cushman & Wakefield’s Ms Skardina.

Some of these trends are showing up in suburban malls, where health care providers are moving into space vacated by retail mergers or closures. Providers find malls attractive because they are familiar to residents, easy to get to, and have ample parking. Another plus is the open floor slabs of the former large stores.

By early 2020, nearly seven in ten adults in the United States were visiting health care providers in malls, indoor malls, or malls, according to a survey by ICSC, the trade group that represents owners of such property.

According to Ellen Dunham-Jones, a professor at the Georgia Institute of Technology who oversees the refurbishment of run-down malls, 32 closed malls across the country have healthcare providers occupying substantial square feet, and in some cases the entire property. Some of the providers expanding university medical systems.

The University of Rochester in upstate New York is building a $227 million 350,000-square-foot outpatient orthopedic center at The Marketplace Mall in Henrietta, four miles from campus. Built in 1982, the house once had four main tenants, but one of them, a Sears store, closed in 2019. The overall vacancy rate rose to 30 percent before the project began, said Jonathan L. Dower, vice president of leasing. for Wilmorith, the owner of the mall.

 

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