From Vacant to Vibrant: Repurposing Retail Spaces for Healthcare
Originally published on February 28, 2024, by Brian Kane for NAIOP.
As the retail landscape continues to evolve with some well-known retailers declaring bankruptcy or streamlining their real estate portfolios, it doesn’t have to signal a loss for the surrounding community. The opposite is true. People increasingly want their healthcare brought closer to home, and with these abandoned spaces comes opportunity.
According to a report from CBS News, in 2023, retailers across the country shuttered more than 4,600 locations – an 80% increase from 2022. Leading the pack on these closures was Bed Bath & Beyond, which went bankrupt in April 2023 and subsequently closed 866 stores across all three of its brands. Discount home goods retailer Tuesday Morning filed for bankruptcy and shuttered 463 stores, Foot Locker closed 116 stores, and drugstore brands Rite Aid, CVS, and Walgreens closed a whopping 807 locations combined. Even big box titan Walmart wasn’t safe from the scourge of cutbacks, ultimately closing 21 stores across 12 states last year.
But from the dust of retail giants comes opportunity for healthcare systems looking to expand, grow, and better embed themselves in the communities they serve. While new construction in healthcare has slowed with the rise of lending and construction costs, many healthcare companies are finding that converting vacated retail space can be an affordable alternative to building a ground-up facility, and at the same time offer patients easier, more convenient access to the healthcare services they need.