Health Care Goes to the Mall

By Kim Bellard | June 27, 2017

Kim BellardIt's either auspicious or ironic: decades after other retail industries, health care is coming to the mall.

These are not, generally, good days for the malls. We've all seen strip malls that were never finished or that have simply fallen on hard times, but in recent years those stalwarts of American shopping -- enclosed malls -- are sharing that fate. Credit Suisse says that 20-25% of the 1,100 U.S. malls will close over the next five years.

Analysts talk about "zombie" malls, whose anchor tenants -- like Sears, JC Penny, or Macys -- have pulled out, creating an exodus of other tenants. The malls themselves still stand, but their largely deserted storefronts and scarce shoppers mean they're dead but they don't know it.

Malls took off the mid-20th century, mostly in the suburbs and especially once they started to be enclosed. The location, convenience and range of choices were unbeatable.

Still, the concept started to seem dated by the 1990's, so the "lifestyle mall" was born. They usually are not enclosed, try to recreate the feeling of a walk-able city center, and typically include destination restaurants and entertainment options like movie theaters or comedy clubs.

Now that lifestyle concept is further evolving. The Wall Street Journal predicts that "the mall of the future will have no stores." They cite malls filling empty spaces with churches, schools, even offices or apartments. E.g., Ford is leasing 240,000 square feet at a suburban Detroit mall for new offices.

The New York Times had a similar report on the changes to malls. As one developer told them, "Dining and entertainment is the new anchor — not Sears, not Macy’s."

One of their examples was how Austin's first enclosed mall had closed, and now is reopening as a new campus for a local community college. It will ultimately serve as many as 20,000 students, and will also include 1,200 residential units as well as some retail.

One thing that many agree upon: malls of the future will include: health care.

Another Wall Street Journal article focused specifically on health care moving to malls, and included several examples:

Dana-Farber Cancer Institute has leased 140,000 square feet of a 286,000 square foot Boston-area mall, which also has several other health and wellness tenants.
The Maury Regional Cancer Center has been in the Columbia Mall (Columbia, TN) since 2012.
The Biggs Part Mall in Lumberton NC has Southeastern Regional Medical Center as a key tenant.
UCLA Health operates primary care centers in the Village at Westfield Topanga.
Vanderbilt Health has been part of the One Hundred Oaks mall in Nashville TN since 2009.

The portfolio manager for One Hundred Oaks mall told WSJ, "We have been very pleased with the performance of [One Hundred Oaks mall], driven in large part by the built-in traffic generated from the Vanderbilt University Medical System." No wonder, the mall had been failing, and now Vanderbilt Health leases half of the mall's space.

Credit - Flickr user Rene Schwietzke (CC BY 2.0)

Other examples include Cedar Sinai (The Runway at Playa Vista -- LA) and Prime Healthcare (Plymouth Meeting -- Philadelphia), according to Bloomberg.

Healthcare Dive profiled the WSJ article, and added that 57% of hospital exces in a recent survey listed improving access to ambulatory and outpatient care as their top priority, and that JLL Corporate Solutions recently urged health care organizations to adopt a "patient-centered" real estate strategy.

How much more "patient-centered" could it be than to locate in malls?

Johns Hopkins Medical President Gill Wylie told Bisnow that he watches retail vacancies for opportunities: "We do urgent care and primary care. So I'm sitting there thinking, 'Gee if all these Staples end up closing, there might be space out there.'" They've already snapped up four former Blockbuster locations for urgent care facilities.

Mr. Wylie said he also pays attention to big department stores and malls, citing their infrastructure, parking, and ADA compliance as givens.

JLL Managing Director Matt Coursen told Bisnow:

In the last three years, it has become pretty apparent that it makes more sense to get some of these urgent care or specialty care centers off campus. The on-campus environment should be reserved for acute care and intensive care surgery centers that traditionally make hospitals more money. Don't put anyone on campus that doesn't have to be there.

Interesting perspective.

Fady Barmada, of Array Advisors, led the conversion of New York City McDonald's to an urgent care center, and noted that: "Health systems know that, by co-locating themselves with well-used and well-attended retail facilities, they can increase the visibility of their facilities and become platforms for the creation of unique and interesting programs."

But moving to retail locations won't, in itself, make health care organizations more patient-centered. To do that, they'll have to make the patient experience easier (if not always enjoyable), give them clear choices, and truly treat them like valued customers.

Moving is easy. Changing is hard.

Health Care Goes to the Mall was authored by Kim Bellard and first published in his blog, From a Different Perspective.... It is reprinted by Open Health News with permission from the author. The original post can be found here.

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