Vacant Big-Box Spaces Create New Outlet for Healthcare

Retail Closures Pave Way for Healthcare Facilities

Over the last 18 months, the U.S. noted a surge of national and regional big-box retailers closing their doors and shutting down operations. Just this year, 99 Cents Only Stores announced it would be closing all 371 of its stores. After these continuous closures affected many retailers, the question remains—what will become of this now vacant space?

Several healthcare operators and hospital systems have taken advantage of these closures. Due to the aging population of the U.S. and the growing demand for healthcare accessibility, some healthcare providers have begun expanding their operations into these empty locations. These expansions allow providers to be more conveniently located within local communities and better meet the needs of their patients.

The closure of 866 Bed Bath & Beyond physical stores created a significant opportunity for healthcare providers. These locations are especially attractive as healthcare providers can house many different care options under one roof. The large amount of square footage from big-box spaces like these allows for treatment room space, dental care, and pediatric facilities.

Hartford HealthCare is one firm that took up an empty Bed Bath & Beyond location in Connecticut. This specific provider began taking up empty retail spaces many years ago, and has been successful in the process. The firm’s goal is to utilize these spaces in order to be convenient to patients, as well as focusing on outpatient care.

In Charleston, a former JCPenney in the Citadel Mall was converted into a new medical center. The West Ashley Medical Pavilion provides primary care options, as well as some surgical operations. This opening in the former big-box space has been so successful that it has added new services this year. There will be new specialty clinics, surgical facilities, psychical therapy operations, and a new radiology lab, to name a few.

The closure of a Sears in Rochester, New York made way for a smooth transition for a new medical facility. In 2019, the University of Rochester Medical Center announced plans to open an orthopedic campus at the empty Sears space in the Marketplace Mall. There was 330,000 square feet left here after the closure, which allowed for the construction of a surgical center, a new lab, and a patient tower. The patient center opened at the start of this year, which marked the end of the project. After taking over the leftover space, the facility is now the largest orthopedic campus in the Northeastern U.S.

Benefits of Healthcare in Empty Retail Spaces

While vacant retail locations offer different property characteristics for medical tenants, those seeking to open healthcare facilities here can find many advantages. One main advantage for these spaces is the location and its convenience for patients. Many of these empty retailers are located in areas that yield high traffic counts, which allows for an increase in patient volumes to new clinics.

Since these spaces are already built, medical tenants don’t have to worry about waiting for construction permits and construction wait times. Although the conversion from retail to medical operations may require city zoning approval and build-out time, it is a much more cost-effective option and quicker process than the traditional build-to-suit model. The flexible space here allows for changes as well, depending on if the tenant wants to remodel for clinic space or labs. Big-box spaces, specifically, aid medical tenants in search of more options for their clinic, due to the high amount of square footage left over from the closures.

For medical providers prioritizing convenient space for their patients, strip centers provide great location traits. Patients can make multiple stops when they make their trip to a center. They are able to grocery shop or run other errands, and then go to their medical appointment in the same location.

Strip centers already boast easy access to the area, parking structures, and building utilities that aid the process of converting to a medical facility. The open floor plans in these spaces allow for the clinic to design their facility in the best way possible to meet their patients’ needs. Also, moving into a strip center allows for lower rental rates compared to starting a new project.

New healthcare tenants must take all of these traits into consideration before moving forward with their openings. Yet, the increase in retail closures across the nation will still be a motivation for healthcare expansions.