One fascinating aspect of language is the way it changes to reflect society. Take "videotigue," for example, which means feeling fatigue from being on Zoom too long.
Another interesting term is "medtail," a concept which has actually been in use for several years now but one that not many people have heard. If you guessed medtail is short for a sort of medical and retail collaboration, you'd be correct. Commercial real estate investors should be interested in this new medtail development that's taking over some retail space.
What is medtail?
The term "medtail'' was being used back in 2017, so it's not exactly a brand-new concept, but it is one that's growing, particularly since COVID-19, which makes it interesting for commercial real estate investors.
Medtail began because of vacancies in traditional retail locations caused by online shopping. Other types of businesses that are more internet-resistant, like service businesses, started to take their place. Entering the retail mix were medical clinics, which traditionally were located in hospital campuses or office buildings. And there you have medtail. The early arrivals were mainly in strip mall locations.
Why strip malls?
Strip malls offer lower rent, for one. Also, these shopping centers are located amid population clusters, usually with ample parking, making them convenient for their potential customer base.
The types of medtail businesses you might see in strip malls run the gamut: dermatology clinics, urgent care, internal medicine, wound care, walk-in healthcare, and physical therapy facilities, to name a few. The benefits of medtail are great, including:
- Customers benefit, as strip malls are usually located in convenient locations for the community in which they serve.
- Society benefits with more access to healthcare.
- Clinic operators benefit, as rent is generally less expensive than in hospital campuses and office buildings.
- Property owners benefit, as medical tenants tend to sign longer leases. (Healthcare tenants want to establish a customer base, and they typically spend significant time and money to properly equip the space.)
What about all those enclosed malls?
Although medtail gained popularity and is seeing success in strip malls, the healthcare sector is finding a place in retail properties in enclosed malls as well. Malls that have lost traffic due to store closures welcome medical establishments, as they tend to bring a steady flow of traffic and can be more appealing with this broader tenant mix. While people are in the mall for their healthcare needs, they might as well pop into a retail store while they're there.
Note that big-box stores, such as abandoned Kmart and Best Buy locations, also make for good medtail spots.
Investors and landlords like medtail
Medtail, because of the benefits to all parties, is an attractive business proposition for landlords and investors. If you look around, you'll see evidence of medtail more and more, and not just in malls, strip or otherwise. You'll see medtail in grocery stores that have walk-in clinics, for example. That's another popular option because after a visit, patients can become shoppers, picking up groceries and their prescription, all without leaving the space.
The Millionacres bottom line
Medtail appears to be a winning development for everyone: consumers, who can be treated quickly and who are more likely to practice preventative wellness more when it's convenient; property owners/landlords, who can fill empty storefronts; and investors -- both who invest in retail centers or in healthcare real estate investment trusts (REITs).