04 Nov 2020

Is Converting a Vacant Retail Space into a Health Care Facility the Right Option?

04 Nov 2020

By Chris Lambrecht, Senior Vice President of Construction and Development, MedCraft Healthcare Real Estate

When walking into a new ambulatory care facility, it is difficult to envision that same space serving avid shoppers instead of ailing patients. Aisles of clothing, racks of shoes and shelves of household goods have now been replaced by pods of exam rooms, nurse stations and medical equipment. As the number of big box retail store closures in 2020 has soared to around 7,500 due to the Amazon Effect and the pandemic’s impact on consumer shopping behaviors, these vacant sites have created an attractive option for health care organizations looking to expand their footprint. The idea of converting empty retail buildings into medical facilities may seem like a promising solution to enhance your ambulatory strategy. Yet, as simple as it sounds, there is more than meets the eye.

In my article which recently ran in ASHE’s Health Facilities Management publication, I offer tips on how to assess whether this approach is right for you. MedCraft also recently hosted a webinar – “Repurposing Big Box Retail Space for Health Care: An Essential Guide” – for a deeper dive and audience Q&A on this topic. You can download the recording here.

As you assess an unoccupied retail site for potential redevelopment, it is important to understand the pros and cons that may affect your project cost, timeline and ROI. Many of these vacant retail buildings are located in heavily populated areas with high traffic, good visibility, easy access and abundant parking – all plusses for ambulatory care facilities. At the same time, you need to assess whether the existing building’s configuration, structural design and mechanical systems – including roofing, flooring, plumbing, HVAC, fire protection, power, internet, etc. – can adequately support the unique requirements of a health care provider.

In addition, depending on how the property is zoned and what its currently permitted uses are, switching from a retail to a medical purpose may require a municipal site plan review and city approval process that could impact the project’s timeline and budget. In some cases, it may be more economically feasible to buy a vacant property if it’s in a good location and build a new facility rather than renovate an existing building, which could end up costing more time and money in the long run.

While there are many options, the ultimate desired goal is to promote a caring and healing environment for patients – from the innermost infrastructure to the outermost perimeter of the property. In the spirit of minimizing surprises, I encourage a thorough evaluation by a team of qualified and experienced professionals to help guide the most strategic course of action. Only conducting an informed assessment can you objectively identify hidden risks and create a realistic scope of work.

For more details on top considerations when considering repurposing vacant retail space for health care use, click here to view an essential checklist. Learn more about how we’ve helped ambulatory care facilities around the country to optimize their operations by checking out our latest projects. Feel free to email me directly with any questions or comments at clambrecht@medcraft.com.

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