For landlords hit by store closures during the pandemic, well-funded healthcare providers, who tend to sign long-term leases, are suddenly desirable.
“As the landlord thinks about what will happen if we ever go through another crisis, they want things that won’t close – supermarkets, pharmacies and medical facilities,” said Ms Scardina of Cushman & Wakefield.
Some of these dynamics play out in suburban malls, where healthcare providers move into spaces that became vacant as retailers consolidated or went bankrupt. Shopping centers find the providers attractive because they are known by the residents, are easily accessible and have sufficient parking space. The open floorboards of former big-box stores are another plus.
According to a survey by ICSC, a trade group that represents owners of such properties, in early 2020, nearly seven in 10 adults in the United States visited a health care provider at a mall, closed mall or strip mall.
Thirty-two closed malls across the country have health care providers occupying significant square footage or, in some cases, the entire property, said Ellen Dunham-Jones, a Georgia Tech professor who follows the renovation of ailing malls. Some providers are expanding university medical systems.
The University of Rochester in New York State is building a $227 million, 350,000 square foot ambulatory orthopedic facility at The Marketplace Mall in Henrietta, 4 miles from the university campus. Built in 1982, the property once had four main tenants, but one of them, a Sears store, closed in 2019. The overall vacancy rate had risen to 30 percent before the project began, said Jonathan L. Dower, vice president of leasing for leasing. Wilmorite, the owner of the mall.