Medtail in Transition

Healthcare providers are seeking retail locations to improve patient accessibility, with location/ proximity being the second most important factor for patients choosing a provider. While move-ins of new medical tenants to retail spaces have decreased since 2019 due to various factors, certain types of medtail, such as physical therapists and chiropractors, are moving into more locations than other provider types. Simultaneously, there's a growing trend in wellness and preventative care services, especially in affluent areas, with concepts like IV drip clinics expanding into retail locations.

1. Healthcare providers are seeking retail locations to improve patient accessibility and in response to tight supply of medical office buildings

• JLL’s 2023 Patient Consumer Survey found that location/proximity was the second most important factor for choosing a provider behind being covered by insurance
• JLL’s 2025 Medical Office Building (MOB) Perspectives recognized that rising occupancy and limited construction for purpose-built MOBs may cause increased spillover into adjacent property types.
• These factors have led healthcare providers to stretch their leasing budgets to secure conveniently located facilities in retail spaces.

2. Providers of in-person preventative & chronic care are moving into retail spaces more than others

• Medical uses that cannot be replaced by telehealth, and which are utilized by patients more frequently have out-numbered other types of medtail move-ins. This includes physical therapists, dentists, chiropractors, optometrists and veterinarians.
• Urgent cares had a large increase in move-ins in 2021 due to COVID but reached oversaturation and has readjusted to market conditions.
• Veterinarians, have expanded both due to a surge in COVID pet adoptions and because many communities still go underserved for this type of provider.

3. Move-ins of new medical tenants to retail spaces have decreased since 2019

• Tight retail availability makes it difficult for medical users to find the right space.
• Certain medical service types are seeing a saturation or oversaturation of the market.
• Dialysis centers, which had been expanding for some time due to the frequency of visits by those who need them, are decreasing openings due to new pharmaceuticals which help keep patients off dialysis.

4. Medtail tenants can provide stable long-term tenancy but provide limited co-tenancy benefits.

• Healthcare providers, once established, are less likely to relocate due to the significant costs associated with moving specialized equipment and the importance of maintaining their patient base in a specific location.
• The specialized nature of healthcare services can make it difficult to create a cohesive tenant mix that complements traditional retail and dining options. For example, a dental office or urgent care facility may not naturally align with apparel or experiential retailers.
• According to JLL’s 2023 Patient Consumer Survey, pharmacies are most likely to benefit as a cotenant to medtail users among retail types.

5. The future of medtail includes wellness, longevity clinics and concierge medicine, which are changing the landscape for healthcare delivery.

• Medical wellness and preventative care will continue to expand in wealthy areas. Concierge medicine, which typically operates on a subscription model, combines wellness and preventative/primary care.
• OneMedical, which was purchased by Amazon in 2023, is an example of this. It has continued to expand primarily in retail locations and now has over 200 in the U.S.
• Medical wellness also includes uses such as cosmetic dermatology and new entrants to the medtail market, like IV infusion specialists.