July 17, 2025 | BOMA International, Ella Krygiel
Medtail, healthcare services located within retail settings, is experiencing significant growth. Praised for their convenience and proximity to local shopping centers, these tenants offer landlords a promising opportunity. As Cushman & Wakefield notes, Medtail businesses “have historically been insulated from economic cycles,” driven by factors such as a deferred healthcare crisis, an aging baby boomer population and the lasting impact of the global pandemic. These dynamics are fueling increased demand for retail healthcare space across the nation. In the sections below, let’s explore why Medtail is gaining popularity, how landlords can effectively attract healthcare tenants and the important considerations surrounding retail health clinics to help you stay ahead of this evolving market.
Medtail’s Resilience and Expanding Tenant Landscape
According to the LA Times, “landlords learned medtail businesses were pandemic and inflation resistant” when health-related stores stayed open and paid rent during the early days of the pandemic, while all non-essential businesses were ordered closed. This resilience emphasizes the long-term viability of growing into medtail spaces, particularly given the proximity to grocery stores, boutiques and restaurants that entice consumers. Chris Aguon, Vice President of real estate at PDS Health, explains why his dentistry practice prefers locations near Target, Costco or Walmart: “We found that women in households tend to make most of the healthcare decisions for the house,” he said. “If they notice that the dentist is conveniently located in that same center, they’ll tend to give us a try.” In addition to dentists, urgent care facilities and veterinarians are leading the charge in Medtail. The LA Times also reports that the “wellness category” is expanding into acupuncture, yoga, skincare businesses and more niche offerings like infrared light-heated saunas or cold plunges.
Adapting Retail Leases to Meet Healthcare Tenant Needs
As demand for retail space grows among healthcare providers, landlords are reevaluating how best to structure their leases to meet the unique needs of this tenant class. As Carr notes, “If evaluated properly, the benefits of placing your healthcare practice in a retail space can far outweigh the costs.” These benefits—such as visibility, convenience, and access to steady foot traffic—are driving more medical users into traditional shopping centers. That said, to successfully attract and retain healthcare tenants, landlords must be prepared to go beyond standard retail lease terms. According to Holland & Knight, retail landlords looking to attract healthcare tenants should be prepared for specialized lease requests that go far beyond typical retail terms, including:
- Reserved parking and covered drop-off areas for patients.
- Exclusive rights to provide certain medical services.
- Flexibility for 24/7 operations, including ambulance access.
- Permission for structural modifications and utility upgrades.
- Lease language tailored to healthcare regulations and insurance needs.
Ensuring Success Amid Medtail’s Unique Challenges
Despite the obvious advantages of Medtail, there are several growing pains to note. The American Medical Association cautioned its members about the handling of patient data at retail health clinics, and how they are not providing clear, informed consent about how patient data is used or shared. For example, because it is often unclear whether these clinics qualify as “covered entities” under HIPAA, patients may unknowingly forfeit key privacy protections upon signing consent forms, potentially allowing their protected health information (PHI) to fall outside HIPAA’s scope. Given these concerns, landlords should approach healthcare partnerships thoughtfully. To mitigate risk and ensure ethical alignment, they should:
- Ensure clinics use plain-language consent forms that clearly explain how patient data may be used or shared.
- Encourage default opt-in consent mechanisms, with guidance that supports patients’ healthcare literacy.
- Establish open, ongoing communication with healthcare tenants to promote transparency, regulatory compliance and mutual trust.
In addition to concerns around HIPAA compliance and informed consent raised by AMA, some healthcare providers are beginning to pull back from retail-based care models altogether. A MedCity News article, for instance, reported that major retail health players like Walgreens and Walmart have scaled back their primary care operations after struggling to align clinical care delivery with sustainable business models. These failures largely stemmed from efforts to apply retail-style efficiency to healthcare – a strategy that often clashes with the complexity required in medical care.
That said, these setbacks don’t mean Medtail is a failed concept. Rather, they highlight the importance of thoughtful execution. With strong alignment between landlord and healthcare provider—particularly around transparency, operational expectations and patient data protections—Medtail partnerships can still thrive. Tying back to the AMA’s concerns, if issues around consent and communication are addressed early and clearly, retail-based healthcare can not only work, but deliver meaningful value. As Carr noted, “the benefits of placing your healthcare practice in a retail space can far outweigh the costs.”
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