Retail Healthcare Trend Benefits MOBs
Over the last few years, the healthcare industry has started taking cues from retail. This is a win-win for consumers (i.e. patients) and long overdue.
Historically, medical appointments have often been inconvenient, time consuming, and frustrating. These small frictions also cause people to put off care.
If retail worked this way – long trips to inconvenient locations, long waits for service, etc. – then sales would be much lower. Retailers learned this lesson long ago and they know how to make shopping as easy as possible.
At long last, the healthcare industry has caught on - although it is early days.
Medical offices are increasingly located in convenient places, like malls. Other businesses, like CVS, now offer clinics that can address a wide range of minor medical needs. Across the board, greater emphasis on customer-centric design is making the process of seeking medical care much more pleasant.
This shift in mentality is good for the medical industry, as it pushes them to deliver better value to customers. Medical providers are being rewarded with strong sales.
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It also benefits consumers, and they have been voting with their wallets. With easier and more convenient options, consumers are less likely to put off needed care. Fewer problems are allowed to fester and worsen. The result is a healthier and more satisfied population.
This shift is also great for real estate investors. Retail vacancies are already historically low. Increasing demand for retail space from the healthcare industry means even more competition in some areas for limited inventory. New construction has been somewhat slow for the last few years, and re-zoning can be a difficult process. As a result, retail demand may continue to exceed supply for years to come.
Alliance has been front-running this trend for years now, and we’re gratified to see our investment thesis rewarded by the market. We own many medical properties in retail and mixed-use locations and quite a few whole shopping centers that are host to medical offices, kidney dialysis centers, and other healthcare businesses.
The real estate industry is catching on, but this trend has legs. The aging of the baby boomer generation, demographic and geographic changes, and the increasing value of medical care are all macro trends that will continue to play out for years. Alliance continues to find new opportunities and we’re confident that our investors will reap the rewards.
POSTED BY
Ben Reinberg
Founder & CEO | Alliance Group Companies
Ben Reinberg is Alliance Group Companies' founder and CEO.
Since 1995, Alliance Consolidated Group has acquired and invested in medical properties with net leases between $3 and $25 million across the United States. With decades of commercial real estate experience, we take pride in committing to meeting the goals of our Sellers, as we consistently and seamlessly adhere to successful closings.
