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Friday, Jun 9, 2023

‘Medtail’ Grows Popular as the Pandemic Wanes

Health care providers are high on shopping centers.

It’s called “medtail,” and it refers to medical providers setting up shop in retail shopping centers.

“Everything is about branding today,” said Jones Lang LaSalle Inc. Executive Vice President Chris Isola, who represents medical companies with partner Bryan Lewitt. “We’ve been using that as our catchy moniker.”

On the retail leasing side, Executive Vice President Shauna Mattis rounds out JLL’s medtail team.

“They want to be convenient for the neighborhood consumer,” Mattis said of clients such as Exer Urgent Care, which has locations at the Vineyards at Porter Ranch and in Northridge. “A lot of the consumers, when they’re not feeling good, they want to see a doctor, grab their prescription and go home. … That was even more relevant when the pandemic hit because people didn’t want to go to the hospitals.”

The trend of medical tenants looking for space in retail centers has been growing in the past decade or so.

“That started to drive the health care off (a hospital) campus,” Isola said. “Health care is funded through reimbursements. A lot of the decision-making in health care is based off of what those reimbursements are incentivizing. There has been a shift where in some cases reimbursements were higher when delivered off-campus.”

Isola also noted the competitive landscape.

“Now the providers have gone out to the community where the consumer may visit in a typical day. Now you can do your shopping, pick up your dry cleaning and see your doctor,” he said.

In that context, a location in a multitenant retail center with built-in foot traffic has become ideal. And yet the trend is not exactly new.

“There’s always been a proliferation of dental, urgent care and physical therapy sprinkled among retail,” Isola said.

However, now the medical tenant at retail centers is becoming more varied and sophisticated to include imaging groups, dialysis and primary care. 

For example, Southern California Orthopedic Institute took 25,000 square feet in Valencia at Bridgeport Marketplace.

“We extended that lease and they expanded during pandemic at the end of 2020,” Isola said. “They love the convenience for their customers – plenty of parking and signage visibility. That’s been a big boon for them.”

Northeast Valley Health Center has locations all over the North Los Angeles region including San Fernando, Van Nuys and Canyon Country. 

“We’ve done a few leases with them,” Isola said. “One is at a Vallarta-anchored center.”

The Latino grocer has been a good magnet for Northeast Valley Health Center customers.

“There’s a lot of synergy between the customer profile of Vallarta and the center,” Isola said. On the listing side, JLL has been hired by the Four Seasons Westlake Village to fill a space at the hotel’s new health and wellness center.

“They have a huge spa and that spa building has a space,” Isola said. “They don’t want sick people with the housewives getting a facial and a massage, but they do see a synergy between the spa wellness aspect and providers in health care.”

Mattis noted the variety in her medical retail leases.

“We’re working with Biolife, they deal with plasma,” she said. “Carbon Health, they’re a concierge medical care provider. We’ve been doing deals with even more specialized care such as Cano Health, which is a one-stop shop.”

Mattis said that a trip to the store can now include high-end skin care, laser treatments and IV infusions. But she added that for a while, big box retailers at shopping centers were resistant to the presence of health care providers.

“Early on, when anchor retail tenants would sign their lease, whether it was a Target or a Wall-Mart, they negotiated an exclusion in their lease because they thought medical was a detraction, taking up parking,” Isola said.

That attitude has changed.

Michael Aushenker
Michael Aushenker
A graduate of Cornell University, Michael covers commercial real estate for the San Fernando Valley Business Journal. Prior to the Business Journal, Michael covered the community and entertainment beats as a staff writer for various newspapers, including the Jewish Journal of Greater Los Angeles, The Palisadian-Post, The Argonaut and Acorn Newspapers. He has also freelanced for the Santa Barbara Independent, VC Reporter, Malibu Times and Los Feliz Ledger.

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