Though shopping malls were sluggish since before the coronavirus outbreak, the pandemic has threatened them even further. Since March, dozens of retailers have filed for bankruptcy, including a number of well-known department stores. The latter is extremely detrimental to malls, who typically rely on department store tenants to serve as anchors, occupying large spaces and drawing in other tenants to pay rent, not to mention throngs of shoppers.
Given the number of store closures that have already ensued or been announced since the start of the pandemic, it's clear malls may need to switch gears soon to avoid a full-fledged vacancy crisis. And it could pay for them to turn to a group of somewhat unlikely yet viable tenants: doctors and dentists.
Could medical professionals come in and save malls?
Though telemedicine has become increasingly popular in recent years, and it's especially common during the pandemic, there's no substitution for in-person healthcare -- a service with perpetual demand. For this reason, malls and medical offices could end up being a good match -- malls need tenants, and healthcare providers need facilities that are conveniently located and easily accessible to patients.
Malls tend to fulfill the latter criteria; they're often located right off highways and on public transportation routes. As such, it pays for malls facing vacancies in the near term to focus their efforts on attracting doctors and medical professionals rather than chase retailers whose businesses may be too sluggish to commit to extended leases.
It's an idea that's actually already started to gain traction. The Landings in Columbus, Georgia, a shopping mall with roughly five dozen stores and counting, has started welcoming doctors and dentists into its facility. And that's not the only establishment turning to medical professionals to sign leases. Last year, well before the pandemic began, the famed Mall of America in Minneapolis announced plans to open a 2,300-square-foot walk-in clinic.
A gamble that could really pay off
Welcoming medical professionals could actually be an extremely strategic move for mall operators. Not only could doctors and dentists help solve their vacancy problems, but they could also, like department stores, serve the very important purpose of attracting visitors. Patients who come in for a dental cleaning, health screening, or flu shot might choose to do some shopping afterward. Even sick patients might choose to engage in some retail therapy following a doctor visit, provided they're not contagious and advised to head directly home.
Struggling malls and their commercial landlords should therefore consider marketing to doctors and other medical professionals, especially as the pandemic batters the retail industry and forces more companies into bankruptcy. It may be somewhat of a break with tradition, but it's a solution that could ultimately head off a looming financial crisis.
Of course, some mall operators might argue consumers don't want to associate the shopping experience with getting stabbed with a needle or a tooth pulled. But given that so many malls are desperate for revenue while losing tenants left and right, it's a relationship worth pursuing.