5Qs for lawyer Steve Kirkham on medtail’s expanding presence in retail centers
Available spaces for 2026 were dear on the floor at the New York ICSC show in December, and most retail chains were snapping up locations for ’27 and ’28.
One of the uses coveted by neighborhood center developers was medtail — a category with constant customer churn that often take up spaces of 2,000 square feet or less.
Chain Store Age spoke with Steve Kirkham — a real estate attorney at law firm Holland & Knight in Nashville— to learn more about the value they provide to grocery-anchored centers.
So Steve, just about every neighborhood center these days houses medtail tenants, and most that we’ve spoken to are open to adding more. How and when did it start?
It’s been a really interesting evolution. Ten years ago, medtail was a second-generation use. It was a use of last resort. Developers weren’t sure about it, and medtail brands couldn’t afford prime retail space. But urgent care providers don’t need that much space, and centers began welcoming them into 1,500-to-2,000-square-foot spaces. Pretty soon, landlords learned that medtail could consistently drive customers to their centers.
Did the pandemic give the use a boost at retail centers?
Yes. Landlords had a downturn and started welcoming them into empty spaces, even combining 1,000-square-foot spaces to welcome urgent care centers. The medtail industry began to refine itself at retail — especially skin care brands that became fashionable establishments. They positioned themselves as spas.
Doctors’ offices tended to be office-like. A check-in desk with long, confusing hallways. Patients could never expect a good experience. So medtail tenants began to focus on customer experience. They began to regard their visitors as customers, not patients.
And did that change landlords’ opinions of medtail’s value to their centers?
Yes. Developers like tenants that are consistent performers. They also learned that these uses don’t come and go. They are always going to be there. And uses such as dermatology clinics can become hot, trendy routines for visitors at malls and shopping centers. All of them do very well. They’re cash in the door for developers.
Medtail brands have also made great strides in presenting themselves as retail brands. Private equity is driving their expansion, and they are aware of the kinds of rents they’re going to have to pay to acquire space in first-class centers.
Several well-known hospitals nationwide have introduced their own branded clinics in retail spaces. Is this both a business and marketing strategy?
They are an interesting dichotomy in medtail. It’s a strategy of the hospital to capture patients outside of their usual market. So they will often take an outparcel in a center as a freestanding emergency room, or a one-day surgery center. You’ll find these in lots of satellite cities and suburbs that commuters pass while driving into a large city.
Will this be an ongoing trend?
It’s a new medical model of hospitals. So they’ll send their cardiologists and their dermatologists out to more mainline types of positions. They’ll likely continue figuring out which of their specialty groups are broad enough to work at retail. It’s a great idea.
