Medtail has always enjoyed success in strip malls but the healthcare sector is finding a place in enclosed malls and abandoned larger spaces in outlet malls. The appeal to landlords is the knowledge that health and medical tenants are recession-proof given that people will always need medical services. The pandemic has also bolstered consumers focus on mental heal and access to health services.
There are some challenges for landlords with leasing to this industry. Traditionally dental and medical clinics are accustomed to paying low rates, enjoying generous incentives and locking in for very long terms. Newer health niches are unlikely to want long terms, but may still be looking for occupancy costs that are closer to office rates, rather then the retail rates that landlords and investors may have expected and enjoyed when dealing with higher margin product oriented retail.
For tenants, it’s crucial to locate in the right trade area, visible and convenient to the patients offering complete accessibility in the space to all abilities. Older buildings maybe a problem with awkward layouts and the need to meet other operational and patient needs. Co-tenancy may or may not matter depending on the particular location and visibility.
Connected to health and wellness is Canada’s active cannabis industry. The lottery licensing system in Ontario produced a myriad of independent operators vying for the required real estate as well as the bigger hitters that came to market with more splash and fame (think Tokyo Smoke and Tweed with Canopy Growth or Fire and Flower). Now we have another emerging focus in the category of new medicine from recreational substances, in the form of psychedelics, predicted to be a boom for the industry. An example is Luminus, a company expanding its retail footprint across the country with safe evidence based delivery of assisted psychotherapies in an accessible environment (Psychedelics Treatment Concept… Aims for… Location Expansion…) But some players have pulled out of cannabis stores, citing the regulatory environment as a challenge, so time will tell if we will see growth in these mental health categories.
Certainly in Canada the medtail phenomena will not be as feverish as for our friends south of the border, but nevertheless, it’s an important category.
