Getting a filling — at the mall. Why dentists and other wellness tenants are in big demand
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Not long ago, dentists were about as welcome as a toothache at shopping centers.
Landlords preferred more conventional retailers in their malls, relegating dentists to out-of-the-way locations if they would lease space to them at all.
Now they are prominent tenants in many shopping centers as part of a growing trend of medical-retail or “medtail” businesses joining boutiques and restaurants at neighborhood malls.
Prime spots in malls “used to be reserved for ‘better’ tenants” than dentists, said Chris Aguon, vice president of real estate at PDS Health, which operates more than 300 dental offices in California including Alhambra Modern Dentistry at Alhambra Place.
The dentist shares the upscale Alhambra shopping center with Sephora and Sprouts Farmers Market, serving patients who might have had to trek to a medical office building in years past to get their teeth cleaned.
It’s a sign of how shopping centers have changed since pandemic restrictions caused many small businesses to close and led retail landlords to embrace a wide range of medical-related tenants including dentists to fill empty space and coax potential customers to other stores in their malls.
With dentists in demand, they can be more choosy about where they set up a practice. PDS Health likes local shopping centers that people who live nearby visit often, preferably with a big-box draw such as Target, Costco or Walmart.
“We also love neighborhood grocery stores,” Aguon said, because people buy food often and many of the shoppers are women.
“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.”
Nevada-based PDS Health recruits young dentists out of dental schools and sets them up in storefront locations around the country. Patients are frequently walk-ins with an immediate issue like a toothache or neighbors who want a dentist closer to home, he said.
The offices are intended to be more appealing than “mom-and-pop” storefront dentists of the past, PDS Health chief executive Stephen Thorne said, with uncluttered waiting rooms and light colors. “It doesn’t feel like a clinic.”
Dentistry is just one example of what in the real estate business is known as “medtail,” a portmanteau of “medical” and “retail.”
The category has been growing since mandatory shutdowns and changing shopping patterns caused by COVID-19 led shopping center owners to change their mix of tenants, said Barrie Scardina, president of retail services in the Americas for real estate brokerage Cushman & Wakefield.
During the early days of the pandemic when all non-essential businesses were ordered closed, health-related stores stayed open and paid rent. Their landlords learned medtail businesses were pandemic- and inflation-resistant, Scardina said.
Urgent care facilities were an early medtail use, followed by veterinarians and then dentists, Scardina said. Now the wellness category is expanding in several directions.
Boutique gyms and chain fitness centers are common in malls. Nearby may be a range of wellness businesses such as StretchLab where clients get help stretching to relieve muscle and joint pain, improve posture and reduce stress.
There are infrared light-heated saunas, showers with vitamin-C infused water and cold plunges at Sweathouz. Other wellness businesses include acupuncture, yoga, red light therapy to reduce pain and inflammation, and IV drips for hydration that include vitamins and minerals also known to ease hangovers.
“We’re also seeing a lot of skincare” businesses, she said.
Another class of wellness provider perhaps coming to shopping centers revolves around semaglutide drugs such as Ozempic, Wegovy and Mounjaro that can help people drop pounds.
“I think there’s a whole new category coming that started in the last two years, and it all stems around weight loss,” said Colin Shaughnessy, executive vice president of leasing in the U.S. for shopping center owner Unibail-Rodamco-Westfield. “The economic impact of something like Ozempic is going to be felt for the next decade.”
Shopping centers may someday include weight-loss clinics with specialized doctors and perhaps life coaches to help people maintain their achievements, he said.
“When they’re on these drugs, a lot of people lose a lot of weight then put it back on” in part because they haven’t created new habits for a more healthy lifestyle and need guidance, Shaughnessy said. “I think it’s the next wave of where healthcare within retail could go.”
People who have experienced weight loss become more likely to join fit people who patronize wellness businesses, he said, and malls will be there for them. He envisions people, for example, visiting a gym, followed by a cold plunge or massage and then finishing up with a healthy meal all in walking distance.
Good health is its own reward, but for some people with the means, “wellness is kind of entertainment,” Shaughnessy said.
The recent growth in experiential retail combines the changing attitudes of shoppers with landlords’ need to fill space. Malls have been struggling for decades as department stores consolidated and fell out of favor.
At his company’s Westfield Century City shopping center, there is a UCLA medical clinic with immediate care, family medicine and other specialties.
Concierge provider Next Health offers a wide range of services including NAD therapy intended to increase energy and mental clarity, ozone therapy to reduce inflammation and boost immunity, and aesthetic services such as botox, microneedling and hormone replacement therapy to raise testosterone or estrogen levels.
People often visit wellness tenants including gyms three to five times a week, he said, which may lead them to patronize other mall businesses as well. The addition of wellness tenants also helps more traditional mall merchants by not being competitors in such typical mall businesses as clothing boutiques, shoe stores or cosmetics.
Medtail joins another category of tenants intended to attract visitors known as experiential retail, which has also surged in popularity since the pandemic as people eager to amuse themselves among friends sought out group activities.
Shared events like pickleball, mini-golf, bowling and ax-throwing are being offered in spaces that once held conventional stores.
Also trending up as mall tenants are purveyors of comforting treats such as warm cookies, elaborate sodas and cupcakes, according to a report by neighborhood shopping center landlord Phillips Edison & Co.
“Ironically, the increase in health and wellness goods and services coincides with the increase in specialty sweets and treats,” the report said, with dessert shop openings going up 50% in a recent one-year period as consumers looked for affordable indulgences.
Even prior to the pandemic, mall operators were having trouble keeping their properties occupied as shopping habits changed, Scardina said, so “it’s been terrific to bring in new concepts to these locations.”
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