Orlando, Fla. — A quarterly study of retail property trends in the southeastern U.S. indicates health care providers may be a significant growth market for retail shopping centers over the next decade.
Two major demographic trends are sparking the change, according to Health Care Reform: Changing Retail Real Estate, published by Crossman & Company, one of the largest third party retail leasing, management and investment sales firms in the Southeast.
Since the Affordable Care Act went into effect more than 17 million Americans have joined the U.S. health care system, and that number is projected to top 30 million by the end of the decade.
In addition, an average of 1,500 Baby Boomers reach retirement age every day in the U.S. and qualify for Medicare.
Both of these demographic waves result in significant additional demand for health care services from consumers who tend to be more cost-conscious. On the other side of the equation, ACA and Medicare requirements are increasing costs and reducing compensation for health care providers.
The Crossman report cites another major trend that makes retail centers so appealing to health care providers.
Employers are shedding the traditional model of working directly with insurance brokers for their employees’ coverage. They are giving their employees a preset contribution to apply toward health care and shifting the burden of choice to workers, and that means cost will be a principal factor in choosing providers.
For health care providers, those trends point the way toward less expensive facilities that are closer to the people who use them.
The Crossman report identifies several factors that appeal to health care tenants, including: good parking, higher ceiling heights, spaces that can accommodate separate HVAC and plumbing systems, options for storage of secure health records to maintain HIPAA standards, resources for the disposal of medical waste, increased use of utilities, specialized janitorial and security services and easy access for patient pick-up and drop-off.
The report concludes that while medical uses in retail centers may require more investment and higher attention to lease negotiations, medical tenants can offer great credit, longer lease terms, and be a positive traffic draw to the center.
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