During the coronavirus pandemic, there was a huge shift to telemedicine as patients with nonurgent issues were advised to stay home and deal with health matters remotely. Once that trend emerged, it started to get real estate investors worried that walk-in clinics and medical offices would start shutting down once patients got on board with the idea of online appointments.
But that doesn't seem to be the case. In fact, medical practices have been clamoring for office space in shopping centers across the country -- and that demand is coming at just the right time.
Making up for vacancies
In the course of the pandemic, many businesses were forced to close down permanently, leaving malls and shopping centers alike with vacancies to fill. Now, medical offices are seeking out leased space, and it could help compensate for the vacancies shopping centers are facing.
Urgent care clinics stole the spotlight in 2020 as patients who couldn't deal with their medical issues remotely chose them over hospital emergency rooms, which would've put them in too close proximity to COVID-19 patients for comfort. Now, more patients are realizing just how convenient these walk-in clinics are.
Many urgent care centers are equipped with not just healthcare professionals but diagnostic equipment like X-ray machines to help give patients definitive answers on the spot. Some walk-in clinics even have their own laboratories -- a perk in an age when COVID-19 testing is still very much a necessity.
As of 2021's first quarter, 2.2% of retail space across the U.S. was occupied by medical tenants, according to CoStar. The reason that number is so low stems from a lack of leasing activity during the pandemic itself.
Still, over the past five years, there's been a 57.6% increase in urgent care facilities at retail centers, according to Cushman & Wakefield. And now, medical clinics want more visibility and accessibility for patients, and they're increasingly willing to pay a premium for it.
Of course, it's in shopping centers' best interest to cater to medical tenants. Not only are these tenants more likely to have staying power than your average retailer (since a need for healthcare will always exist), but they're also less likely to have growing competition from their online counterparts.
While telemedicine was popular during the pandemic, it was due to the extreme nature of the coronavirus outbreak. And remote diagnostics only work so well in a medical setting -- you can't identify a bacterial infection without physically swabbing a patient.
The Millionacres bottom line
All told, the expansion of walk-in clinics is great news for shopping centers and the people who invest in them. While many consumers may still be shying away from malls due to health-related concerns, shopping centers offer an added layer of comfort, since it's possible to pull up, park, enter a single store, shop quickly, and leave. In fact, a lot of retailers are making the decision to go off-mall for this reason, and while that's not the best news for malls themselves, it puts shopping centers in a much stronger position to thrive.