Medtail: When Healthcare Meets Retail

Over the past 12 months, we have seen the retail landscape transform with the emergence of new brick-and-mortar retail tenants. Consumer expectations for convenience have extended beyond the home delivery of goods to include easy ways to obtain health and wellness services, prompting medical services to move into retail space once occupied by apparel and accessory tenants. An aging Baby Boomer population and increased focus on health has caused services from urgent care to dermatology to expand from coast to coast. This new retail sector, known as “Medtail,” is a great addition to the retail tenant mix that provides creative ways for landlords to fill vacancies and generate foot traffic. However, landlords should be aware that Medtail tenants have different needs than typical retail.

What is Medtail?

Medtail refers to healthcare services located in a retail setting. Typical Medtail tenants include vision or dental offices, but now, specialty wellness services are also growing in popularity. Medtail can be found in a variety of retail centers, including strip malls, shopping centers and shop-in-shop concepts (i.e. clinics inside retail stores). Top U.S. retailers are quickly joining the healthcare industry, including Walmart, Walgreens and CVS. Private equity firms are eager to invest in these types of healthcare providers , most notably placing urgent care clinics. In addition to big box retailers, Medtail clients in the alternative medicine and veterinary services sectors are growing in number, driving demand for space.

Types of Medtail include:

  • Urgent care
  • Cosmetic / medical spas
  • Veterinary and pet services
  • Occupational / physical therapy
  • Skincare
  • Acupuncture
  • Holistic / alternative care centers
  • Imaging services

What are the specific needs of Medtail Tenants?

Medtail tenants have different needs and considerations than a typical retail tenant that landlords should be aware of, including:

Load factors / weight constraints

Some Medtail users may require different floor load factors to accommodate the increased weight of specialized medical equipment. Any kind of imaging or other advanced diagnostic equipment could require reinforced flooring, and potentially reinforced walls. Labs may require fume hoods or other specialty items.

Disposal of medical waste

Special pick-up services are required for the disposal of medical waste and should be addressed in the lease. It must be kept separate from general waste. Commonly, the healthcare tenant is responsible for arranging this service, but this can impact insurance requirements for the landlord because they are still liable for what happens on their property and any potential contamination issues that could arise. Landlords will want to ensure pick up is done a discreet and secure location.

Surgery centers

Any type of facility that does procedures could require an additional electrical feed and backup generator. In some states, they must have a covered entrance for patients, and in others, an ambulance on standby to transport patients who may experience distress while under anesthesia.

Fire and life safety

Medical facilities typically require above standard fire and life safety systems, like clearly marked exits and sprinklers. Make sure to consult with your tenant about any additional requirements.


Medtail brands tend to avoid being co-located with non-health-conscious stores like smoke shops. Co-tenants who support wellness goals are an added benefit. Co-tenancy clauses are important to Medtail tenants to protect their brands.

ADA Considerations

The ADA requires that healthcare entities provide full and equal access for people with disabilities. Healthcare providers require dedicated ingress/egress, some uses require a covered entryway depending on local guidelines/zoning/permitting. Ample parking is vital for healthcare tenants. Parking lot maintenance is a priority for these tenants because poorly maintained parking lots or walkways pose trip and fall hazards.

TI Costs

Depending on the use, tenant improvement can be very costly for healthcare. For heavy medical uses, every exam room must have a sink in it, often these facilities prefer to have separated restrooms (one set for staff, a separate set for patients), among other preferences and needs. With the current cost of construction, this is a significant topic in lease negotiations. Depending on the healthcare entity signing the lease, they could have very high tenant improvement allowance demands—i.e. $50 to $75 per square foot (psf) is standard in a medical office building, but their total cost could run between $200 and $300 psf for standard healthcare uses.

Medtail opportunities and the new healthcare mix.

A deferred healthcare crisis and an aging baby boomer cohort is driving the rising demand for a wide range of medical services, from access to convenient care to higher acuity services that are delivered in an inpatient setting, to chronic disease management and in-home healthcare services. The U.S. continues to see changes in the healthcare landscape that includes a variety of mediums. “A combination of digital, physical, and personal experience in all industries is the best recipe for success, so finding a way to marry all three is now the main task of healthcare providers,” says Dan Stanek of WD partners. This new healthcare mix features a mix of virtual visits and medtail visits to help minimize appointments scheduled at hospitals.

This omni channel approach to healthcare has been significant in seeing large retailers like Walmart acquire telehealth technology, as well as CVS acquiring Aetna. Retailers are considering the new healthcare mix as an opportunity to grow their business which will lead to an increased real estate footprint. Dollar General CEO Todd Vasos said “our customers have told us that they would like to see increased access to affordable health care products and services in their communities.”

The growing popularity of traditional alternative medicine , like acupuncture, homeopathy and naturopathy, is also providing new Medtail opportunities. In today’s definition it has expanded to include things like massage, chiropractic medicine, herbal medicines, and meditation. From 2010 to 2020, the alternative medicine industry grew its employment by double, from 60,000 to 120,000 employees, according to the U.S. Bureau of Labor Statistics (“BLS”).

It’s not just human wellness services that are growing, pet care is too. As the number of household pets has increased, so has the number of veterinarians to care for them. According to the U.S. Bureau of Census, the number of veterinarians, veterinary technicians and veterinary assistants has roughly doubled over the last two decades. This growth is driving demand for increasing amounts of veterinarian retail space across the nation.

Medtail tenants are here because convenience is king

In a world of convenience, delivering healthcare and other personal care services from retail locations is the next step in the retail evolution. These healthcare tenants are creating a new source of demand for retail space. Over the coming decade we expect to see the Medtail sector absorb more retail space in shopping centers across the nation.