Health centers quickly filling up space in Philly area malls

How about treating yourself to a shopping spree after getting good news at your annual physical?

That opportunity has arrived, as more mall spaces are being used as medical offices and health centers to resuscitate struggling suburban malls.

Examples in the Philadelphia area include Main Line Health Center at Exton Square Mall, Suburban Health Center at Plymouth Meeting Mall, and the Center for Neurological and Neurodevelopmental Health (CNNH) at Voorhees Town Center.

Retail and real estate experts say the trend is on the rise, especially among malls looking to fill space vacated by traditional retailers with new tenants to generate rental income and increase traffic.

Steve Downey, 47, a cancer survivor from West Chester, is used to getting his blood work done at Main Line Health Center at Exton Square Mall in Chester County every four months. Downey said he followed his physician when he and the center moved to the mall two years ago.

“It’s close to work,” said Downey, who works in health-care IT in Malvern. “It never really felt awkward since there is a separate entrance. You really don’t have to go through the mall.”

Garrick Brown, vice president for retail research of the Americas for Cushman & Wakefield, said the number of health-care providers – including urgent-care centers – using retail space was way up overall.

He cited Denver-based DaVita Healthcare Partners Inc. – one of the country’s largest kidney-care companies – opening between 100 and 150 locations annually. Most are in quasi-retail or actual retail spaces inside community or neighborhood centers.

“But movement into malls is a new trend – one that no doubt will grow,” Brown said. “The big question is if we may start to see entire health-care campuses moving into struggling malls. This has not happened in large numbers yet, but we do see this as a likely trend ahead.”

At ailing Class B and C malls, the conversion of vacated retail space to medical offices has already started.

“Adaptive reuse is the name of the game when we are talking about survival for many of the hardest-hit shopping centers in the United States,” Brown said.

Pennsylvania Real Estate Investment Trust (PREIT) owns both Plymouth Meeting Mall and Exton Square Mall, and negotiated the leases for Suburban Health Center and Main Line Health Center.

“This was an opportunity we recognized a few years ago, and while we are selective in its deployment, we know there are synergies between health care and retail, where customers require convenience, access, and comfort,” said PREIT CEO Joe Coradino. “For retail centers, adding health-care uses can offer a convenient new amenity for existing customers in an environment where we are looking to deliver unique offerings, and also bring new customers to our door that are pressed for time and looking to pack some errands in.”

Real estate experts say there are benefits for both parties.

“Health-care providers are looking for quick ramp-up space, thanks to the extra demand on their systems they have seen since the implementation of Obamacare,” Brown said. “Urgent-care and triage centers particularly need a lot of space, and retail space fits the bill for many of them.”

It did for Main Line Health Center when it moved into a 32,000-square-foot space at Exton Square Mall in 2014.

“The vast majority of our existing patients followed us to the new location at the mall,” said Main Line Health spokeswoman Mary Kate Coghlan. Among the perks: complimentary valet patient parking, ample parking dedicated to patients of the health center, extended hours on nights and weekends, and a one-stop registration hub for all appointments and testing.

Malls are typically close to population centers and located on public transit lines, which make them attractive to health providers, said Andrew Maguire, a real estate partner at McCausland Keen & Buckman in Devon, who negotiates leases for a variety of retail landlords and health-care tenants nationally.

“Malls of all shapes and sizes, traditional ‘high end’ or mediocre, are faced with fixed costs of operations and reductions of mall tenant retailers, forcing a view to nontraditional tenants,” said Keith Jelinek, managing director at Berkeley Research Group L.L.C., a strategic consultant in Century City, Calif. “Big hospitals and big malls are moving toward a neighborhood style to coexist.”

Retail experts say it comes down to convenience – having it all under one roof.

“Having medical offices in malls is a good draw to increase foot traffic and create more opportunities for consumers to browse retail stores while in one location,” Jelinek said. “We will likely also see an increase in fitness and health facilities, entertainment, and beauty and skin-care solutions such as day spas” at these malls.

The 16,000-square-foot Center for Neurological and Neurodevelopmental Health that opened in May 2015 in Voorhees has been well-received, said Matan Mintz, who handles its administration and community affairs.

“Our experience over the last year has been very positive for both our patients and our staff,” Mintz said. “Our patients enjoy the convenience of food and shopping, while they wait for their child to finish an appointment. . . .

“The location of the mall also makes our office easily accessible by bus and train,” Mintz said. “Our health staff enjoys the convenience of our location for lunch breaks.”

The only drawback, said Mintz, was that “some first-time patients have a hard time understanding that we are inside a mall . . . so they may get lost trying to find us.”

There was no confusion for Kathy Dodds, 62, of Downingtown. She got her annual mammogram at Main Line Health Center at Exton Square last week.

“I like it,” the high school teacher said of the layout. She used to drive to Paoli for her health visits. “There’s plenty of parking and this is only five minutes away on Route 30.”

sparmley@phillynews.com

215-854-4184 @SuzParmley