Health care providers, in an effort to meet the needs of aging baby boomers and increase their visibility across the suburbs, are adding clinics in former retail locations, squeezing into former video rental shops, restaurants and corner drugstores.
The trend recently has swept across the eastern and southern suburbs, where groups such as like HealthPartners/Park Nicollet are moving into renovated retail space or, in the case of HealthEast, building clinics from scratch near commercial centers.
HealthPartners/Park Nicollet opened an outpatient clinic in a former Hollywood Video store in Lakeville in 2011 and another in a Woodbury building that once housed a Movie Gallery. That building was converted two years ago into an Urgency Room, a high-end urgent care clinic that’s open from 8 a.m. to 10 p.m. daily.
HealthEast, the largest provider in the East Metro, has been at the forefront of the movement. It’s gaining traction at a time when the health care industry is changing to accommodate aging baby boomers, many of whom are less willing to drive across town to see the doctor than they might have been a generation earlier.
“There is a trend in the healthcare industry that they need to look at it as almost a retail service, in terms of location, convenience, and hours of operation,” said Janelle Schmitz, planning and economic development manager in Woodbury, home to the Urgency Room and a still-under-construction 18,300-square-foot Health East pediatric and family medicine clinic. “They almost have a retail mentality.”
Hugo’s first urgent care facility, opened last May, was built off Main Street, near a Festival Foods grocery. In Eagan, an Urgency Room clinic opened its doors down the street from a Sprint store and the post office. Allina Health is planning to build a clinic in the 58,500-square-foot retail development called Oakdale Station, which is anchored by an LA Fitness, near the busy interchange of Interstate-694 and Highway 5
Len Kaiser, director of business development for HealthEast, said the retail locations “work extremely well for all the reasons that retailers want to be there. It’s a place where patients can come not just for their healthcare, but they can also get their shopping needs taken care of. So we’re becoming more a part of these communities.”
Colliers International, a commercial real estate brokerage firm, noted the trend in a 2013 survey, saying that the “streamlining of healthcare delivery models is resulting in the changing use of medical real estate. The trend is for hospital space to be used only for the very sick and emergencies and healthier people treated in highly-specialized outpatient facilities and clinics.”
The study, which surveyed buildings with more than 20,000 square feet of space, predicts that nearly another 1 million square feet of medical office space will be added statewide in 2014.
That bodes well for health care providers, who are eager to increase their visibility and strengthen ties with the communities they serve. It also bodes well for commercial retail landlords.
Herb Tousley, director of real estate programs at the University of St. Thomas, said landlords are eager to work with health care providers because “they’re good solid, high-credit tenants and they’ll sign a long-term lease.”
In 2012, the Urgency Room transformed a shuttered video rental store in a heavily trafficked commercial area into a walk-in urgent care clinic.
Last year, the clinic had 16,286 visits, up 22 percent from 2011.
“It really has been a great fit,” said Becky Leagjeld, manager of business development at the provider, which has two other stand-alone clinics in the metro.
“It helps with relationship building,” Leagjeld said last week. You’ve got a relationship with the owner of the complex itself, and then you build relationships with those folks around you.”