The 1.2 million-sf shopping mall Rosedale Center in Roseville, Minn., yesterday disclosed its plans for a $100 million-plus expansion that will add a hotel, grocery, multifamily housing, fitness centers, restaurants, coworking spaces, more retail, and a medical office building.
Within the $400 billion global market for healthcare construction, two-fifths of all new retail transactions are for medical offices, compared to 2% a decade ago, according to recent AIA estimates. The number of medical centers in retail space—which Accenture put at 2,800 in 2017, compared to 351 in 2006—could nearly double by 2022, according to JLL projections.
As more developers, landowners, and retail strip owners look for ways to bring a medical facility to their properties, “nontraditional retail spaces for healthcare services are expected to continue to rise in popularity,” predicts JLL in its 2019 research report “Retail and the New Healthcare Consumer.”
Medical office buildings reflect the 'Amazon effect'
That medical offices are finding their way into empty retail space partly reflects the “Amazon effect” that has made online ordering a prevalent mode of shopping and has left bricks-and-mortar vacancies in its wake.
“Healthcare is seeking out locations that are convenient and accessible to their patients,” explains Steve Barry, president of Rendina Healthcare Real Estate, a developer based in Jupiter, Fla. “Retail often has great visibility, great access to traffic count, and plenty of parking.”
Rendina has been exploring this trend for a while now, he says. A few years ago, the firm developed a project for Hilton Head Regional Healthcare in South Carolina that placed a 60,000-sf outpatient facility inside a vacated Publix supermarket with a shopping mall.
Rendina is currently in the process of developing a project that will create an 80,000-sf healthcare facility within a regional shopping mall that Barry says is repositioning itself as a lifestyle center that includes entertainment and grocery venues. Barry couldn’t identify the location or client for this project, but says its construction should start next year.
Retrofitting a retail store for conversion to a medical office depends on the level of care being provided, which may have structural and air ventilation requirements, says Barry.
From a land-pricing and operational cost standpoint, moving healthcare into retail could actually be more expensive than, say, opening a stand-alone facility, because retail stores, says Barry, are generally in higher-density (and higher-rent) locations.
What’s more important, however, is attracting the right kinds of customers to these buildings. “Patients are exerting far more control over where they go for care,” he says.
Barry foresees this trend having some runway left. He expects to see new variations and models, too: for example, his firm is working on developing a hybrid urgent-emergency care facility under one roof, so that patients could access the appropriate care and be charged appropriately for it. Medical offices, says Barry, “would be part of this rehab mix.”
He believes that, despite technology advancements that allow patients to access care from their homes or phones, “healthcare in general will always have a need for space.”
Related Stories
Healthcare Facilities | Apr 13, 2023
Healthcare construction costs for 2023
Data from Gordian breaks down the average cost per square foot for a three-story hospital across 10 U.S. cities.
Healthcare Facilities | Apr 13, 2023
Urgent care facilities: Intentional design for mental and behavioral healthcare
The emergency department (ED) is the de-facto front door for behavior health crises, and yet these departments are understaffed, overwhelmed, and ill-equipped to navigate the layered complexities of highly demanding physical and behavioral health needs.
Urban Planning | Apr 12, 2023
Watch: Trends in urban design for 2023, with James Corner Field Operations
Isabel Castilla, a Principal Designer with the landscape architecture firm James Corner Field Operations, discusses recent changes in clients' priorities about urban design, with a focus on her firm's recent projects.
Market Data | Apr 11, 2023
Construction crane count reaches all-time high in Q1 2023
Toronto, Seattle, Los Angeles, and Denver top the list of U.S/Canadian cities with the greatest number of fixed cranes on construction sites, according to Rider Levett Bucknall's RLB Crane Index for North America for Q1 2023.
Contractors | Apr 10, 2023
What makes prefabrication work? Factors every construction project should consider
There are many factors requiring careful consideration when determining whether a project is a good fit for prefabrication. JE Dunn’s Brian Burkett breaks down the most important considerations.
Architects | Apr 6, 2023
New tool from Perkins&Will will make public health data more accessible to designers and architects
Called PRECEDE, the dashboard is an open-source tool developed by Perkins&Will that draws on federal data to identify and assess community health priorities within the U.S. by location. The firm was recently awarded a $30,000 ASID Foundation Grant to enhance the tool.
Sustainability | Apr 4, 2023
NIBS report: Decarbonizing the U.S. building sector will require massive, coordinated effort
Decarbonizing the building sector will require a massive, strategic, and coordinated effort by the public and private sectors, according to a report by the National Institute of Building Sciences (NIBS).
Healthcare Facilities | Mar 26, 2023
UC Davis Health opens new eye institute building for eye care, research, and training
UC Davis Health recently marked the opening of the new Ernest E. Tschannen Eye Institute Building and the expansion of the Ambulatory Care Center (ACC). Located in Sacramento, Calif., the Eye Center provides eye care, vision research, and training for specialists and investigators. With the new building, the Eye Center’s vision scientists can increase capacity for clinical trials by 50%.
Healthcare Facilities | Mar 25, 2023
California medical center breaks ground on behavioral health facility for both adults and children
In San Jose, Calif., Santa Clara Valley Medical Center (SCVMC) has broken ground on a new behavioral health facility: the Child, Adolescent, and Adult Behavioral Health Services Center. Designed by HGA, the center will bring together under one roof Santa Clara County’s behavioral health offerings, including Emergency Psychiatric Services and Urgent Care.
Healthcare Facilities | Mar 22, 2023
New Jersey’s new surgical tower features state’s first intraoperative MRI system
Hackensack (N.J.) University Medical Center recently opened its 530,000-sf Helena Theurer Pavilion, a nine-story surgical and intensive care tower designed by RSC Architects and Page. The county’s first hospital, Hackensack University Medical Center, a 781-bed nonprofit teaching and research hospital, was founded in 1888.