Hospitals and other healthcare providers are expanding into the empty spaces left behind as malls lose anchor retail tenants
—By Konrad Putzier
Article originally published in The Wall Street Journal, Feb. 1, 2022
The Marketplace Mall in Rochester, N.Y., has a food court, arcade games and plenty of fashion boutiques. Soon, it will perform hip replacements and rotator cuff surgeries, too.
A closed Sears department store and an adjacent wing of the mall are being reborn as a roughly 350,000-square-foot orthopedic healthcare campus. It will include operating rooms, outpatient facilities and medical and administrative offices.
The University of Rochester Medical Center’s $227 million project is part of the recent boom in mall-to-medical conversions. Malls have long been home to urgent-care facilities or doctor’s offices. But in recent years more property owners have started turning entire sections over to hospitals or clusters of medical tenants.
Closed department stores and rising vacancies, which accelerated during the pandemic, mean landlords are increasingly desperate to fill big blocks of space. Medical tenants, along with schools and warehouses, offer a way to do that.
They represent the latest sign that mall owners are focusing their efforts to offset declining retail business with new offerings and services that can’t be easily replicated online.
Malls offer cheap real estate, ample parking, easy access to highways and plenty of nearby customers.
Many medical providers, meanwhile, have been looking to expand amid rising healthcare spending. Malls offer cheap real estate, ample parking, easy access to highways and plenty of nearby customers.
Covid-19 turned hospitals into de facto coronavirus wards. That forced them to forgo profitable elective surgeries—such as knee replacement or hand surgery—and it highlighted the need for outpatient facilities far away from contagious patients. Malls often fit the bill.
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