Product Focus: Merger of med & retail

PROFESSIONALS SAY TREND FINALLY TAKING SHAPE

By Dan Emerson

Close to the customer: The Vanderbilt Health facility at 100 Oaks Mall in
Nashville, Tenn., is flanked by a KG Fashion Superstore and a TJ Maxx.
Photo courtesy of Gresham Smith and Partners

The passage of healthcare reform legislation notwithstanding, no one can predict exactly what the country’s healthcare delivery system will look like five, 10 or 20 years from now.

But one possibility for the future of such a delivery system can be glimpsed in Nashville, Tenn., where Vanderbilt Medical Center leases nearly half of the 850,000 square foot indoor shopping center called One Hundred Oaks, a previously moribund property where the remaining retail tenants are now thriving.After a year that saw the bankruptcies of several major retail chains and numerous store closings in other companies, the retail real estate sector is in its worst shape in decades.

Nationwide, retail vacancies are expected to reach nearly 12 percent by the end of 2010, according to a recent report by Santa Ana, Calif.-based Grubb & Ellis Co. (NYSE: GBE)

But demand for healthcare real estate has remained relatively strong as providers strive to position themselves for a delivery system that is expected to place more emphasis on outpatient care. Providers want to be closer to their patients – both existing and prospective – many of whom are located in the same desirable suburban areas coveted by retailers.