‘Medtail’ makes its name in North Texas
Changing consumer and practitioner mindsets are aligning with landlords to attract more healthcare tenants to the retail space.
The so-called “medtail” is a growing trend in North Texas, in part due to hospital systems and real estate brokers transitioning new developments away from large community hospitals and free-standing healthcare buildings to medical centers and lean retail stores (read our column on transitioning healthcare systems to retail here). The rise of medtail is accompanying the growth of online shopping, reducing the need for physical outlets for consumer goods. But most healthcare services cannot be delivered online, making them excellent candidates for outlets to drive foot traffic into a development.
Dallas-based Northwood Retail, which operates Park Lane stores, has been at the forefront of this trend, signing commercial leases with seven healthcare providers and nine wellness centers last year.
Retail is less about the right customers, says Northwood president Ward Kampf, and that’s largely due to a perfect storm of demographic shifts. Aging baby boomers have a greater need for healthcare facilities, and young millennial and Gen Z consumers are bringing increased health and wellness awareness to their discretionary income. As the older generation seeks to slow down the aging process, the growth of social media means today’s youth have more eyes on them than generations past. They want to look healthy and beautiful in front of the camera, which emphasizes health and well-being.
Consumers are also looking for convenience. Medtail allows them to get in and out quickly and avoid large medical centers and shopping malls with inconvenient parking. Ferrari Orthodontics in Lakewood and Westlake Dermatology across from SMU are new examples of health and beauty retail developments reflecting changing demographics. “Kids today are more aware of appearances,” says Kampf. “These companies are aimed at young consumers.”
The growth of urgent care has benefited from this growing trend in North Texas. Children’s Health, Baylor Scott and White Health, Texas Health and Medical City Healthcare all have their own outpatient primary care and emergency care brands, which can be found at outlets around DFW. Urgent care is supposed to be convenient and efficient, and retail just makes sense for patients.
“In terms of facility expansion and the types of facilities we’re talking about, healthcare retail is really about two things: brand visibility and accessibility for patients,” says Ethan. Garner, senior vice president of JLL.
Pedestrian traffic is also an integral part of the equation. Due to the way we consume healthcare today, health and wellness locations can be significant drivers for shopping malls, so landowners are operating health, wellness locations. health and dental care to fill empty retail spaces. Retail giants CVS and Walgreens have also launched their own health clinics, adding more vendors to retail developments. “Mindsets are changing,” says Kampf. “A doctor can generate traffic. People ask, ‘Does this suit you?’ »
Concierge medical practices are another model that lends itself well to retail, and their growth has been a driver of the medtail trend. Administrative hassles and declining reimbursement rates have led many physicians to withdraw independently and operate outside the health insurance market. These doctors don’t want to retire but are fed up with bureaucracy, and if they can attract enough wealthy patients, it can be lucrative.
“Doctors want to do their own work and have their own clientele,” Kampf says. “For families and seniors, they want that capability or 24/7 access because they know they’re getting older and they want quick access.”
Highland Park Village, one of the state’s most luxurious retail spaces (and its first), is no exception to the trend. Dr. Barbara Sturm recently opened a medical spa offering wellness and skin care services. A generation ago, it would have been odd to find a medical practice between Prada and Gucci, but healthcare is increasingly seen as a high-profile tenant.
“They’re going to be careful that their mall isn’t run down or there’s a vape store next to them,” says Thomas Allen, CEO of Practice Real Estate. “They will pay the rents to have the beautiful centers.”
Luxury and mid-range property owners continue to see healthcare as an asset rather than an option of last resort because of the way we consume healthcare today. “It’s for all spectrums. Whether it’s a premium center or a matter of convenience, people want these services to be part of the business offering,” says Kampf. “People want a retail presence, footprints and awareness.”
Will is the editor of CEO magazine and editor of D CEO Healthcare. He wrote about health care…