Medical tenants have become key value drivers for retail, blending healthcare with convenience and helping landlords backfill vacancies with long-term, stable leases.
You can see the trend in action at shopping centers across North America:
- Providers affiliated with major hospitals have opened outpatient facilities in retail storefronts.
- Amazon’s One Medical lets patients schedule next-day appointments at physical locations.
- Meanwhile, Tia and Kindbody offer storefront women’s healthcare and primary care.
For years, property owners kept healthcare tenants out of the mix, worried sick patients would drive away shoppers and dilute the consumer experience. Then a perfect storm of factors turned medtail outposts into some of the most reliable anchors in retail real estate. Among them: shopping center vacancies, an aging population, tight medical office vacancy, market shifts, and consumer demand for convenience.
Investors have come to see that these tenants commit to longer leases, pay premium rents, and can even enhance the credit profile of an entire shopping center. Avison Young has helped clients get in on the action by pivoting from medical office buildings to retail space.
Who are these tenants and what do they have to offer?
Let’s explore.
Tenant types: exploring medtail’s health vs. wellness categories
“Medtail” and “wellness” have emerged as distinct medtail categories, each with its own more specific subcategories.
Below, we showcase more about these two types of tenants: what makes them special, what kinds of owners are categorized under each and the unique opportunities each one could offer an open vacancy.
Medtail: the doctor is in...your shopping center
The medtail category of health-oriented tenants belongs to licensed, regulated providers operating in retail spaces.
Medtail tenants include:
- Urgent care centers
- Standalone primary care providers' offices
- Dialysis centers
- Dental and orthodontic offices
- Radiology groups
- Physical therapy clinics
- Optometrist boutiques
- And more
The opportunity: Medical tenants invest in their custom spaces, sign long-term leases, and drive traffic to other tenants, making them ideal for investors looking to anchor shopping centers and retail corridors.
Wellness: bringing feel good foot traffic
“Wellness” encompasses preventative, elective and lifestyle-oriented services promoting health, longevity, beauty, and fitness.
This includes:
- Cosmetic medspas
- Facialists and estheticians
- Cryo chambers
- Infrared saunas
- DEXA scans
- Alternative and Eastern medicine providers
- Boutique fitness centers
The bottom line: Wellness operators typically call for less intensive buildouts than dialysis or radiology centers, and some make shorter lease commitments. These businesses bring a healthy amount of foot traffic to high-end centers and can be seen as complementary to an investor’s tenant mix strategy.
An exception to the rule
Trove is a Canadian wellness operator that focuses on stress relief and nervous system regulation, targeting busy urban professionals seeking balance and recovery. The concept encapsulates the wellness wing of medtail, due to its focus on lifestyle-oriented services over traditional medical care. But a unique differentiator is the extensive buildout and longer-term lease when compared to other wellness operators. These commitments are what make Trove a true anchor in Toronto. Avison Young supports operators like Trove by helping to identify strategic locations in markets with strong demographics, high household incomes, and complementary co-tenancy from other wellness-focused brands.
Retail Rx: medtail tenants are helping CRE thrive
Because many medtail users need 5,000 to 15,000 square feet, they're great for absorbing those mid-sized spaces left behind by traditional retailers and pharmacy closures. And they can generate a spillover effect that boosts sales across co-tenants.
Healthcare providers, meanwhile, gain prime frontage on major thoroughfares, greater brand recognition through signage, and the kind of convenience patients increasingly desire and expect.
Side effects may include...
Those costs often require landlord-funded tenant improvements, making longer lease terms essential to justify the investment.
Looking ahead: who’s powering medtail’s growth?
On the wellness side, medspas, IV therapy, and cryotherapy are continuing to gain traction in higher-end centers, adding complementary traffic and merchandising appeal.
An aging population, the rise of telehealth, and the evolution of retail all point to deeper healthcare integration in retail.
For investors, the takeaway is clear: medtail has moved from opportunistic fill-in to a core portfolio strategy.
Medtail magic, the Avison Young way
At Avison Young, we leverage advanced data analytics and local market intelligence to help retail landlords identify existing market voids and optimize the tenant mix, ensuring competitive positioning in rapidly changing markets. We help landlords make better decisions on tenant placement by providing insights that go beyond basic comps and leasing data to include granular, real-time consumer and site analytics.
Reach out to our experts to learn more about how to make the most of this opportunity.
Meghann Martindale, CLS
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- Principal, Director Market Intelligence, Retail
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- Retail
- Market Intelligence
Chas Simcox
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- Principal, Tenant Advisory and Occupier Solutions
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- Consulting & Advisory
- Landlord Representation
- Tenant Representation
Marissa Rose
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- Associate Director, Occupier Solutions
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- Capital Markets Group
- Retail
- Occupier Services
