If you’re looking at a new space for your medical practice, pay careful attention to the type of space and what it’s zoned for. The space in which you choose to locate your practice can significantly affect your visibility, patient mix, and earning potential. When deciding between a retail or office medical practice space, do your due diligence – or work with a team like GZ – to ensure you understand what makes your brand different, your patient expectations, and the impact of neighboring businesses.
The Pros and Cons of Office Space
Most medical practices have traditionally used office space, a trend that continues today. There are reasons for this, including:
- Affordable lease terms. Office space is traditionally much more affordable than retail space, as the value is in the building itself and not visibility. Additionally, taxes, maintenance costs, and tenant improvement terms tend to be more advantageous on office space leases, giving your practice more bang for its buck. For practices that are heavily focused on keeping operating costs down, office space is often the right choice.
- Familiar and convenient. Medical office spaces are familiar to most patients, who know what to expect and what to look for. Additionally, many neighboring spaces will be occupied by other complementary healthcare providers, helping build referral business. Dedicated parking can also offer convenience for both physicians and patients.
However, there are possible downsides to an office space for your medical practice, such as:
- Lack of visibility. For some medical practices, lower visibility is a minor trade-off, as the patient mix comes through referrals, insurance networks, or online searches. But for those who rely on walk-in business, being away from a high-visibility road can pose a challenge to business viability.
- Branding challenges. The shift towards hospitality-inspired spaces in medicine has reshaped patient expectations around what a medical space should look like. For some patients, a traditional office may seem old-fashioned or outdated, with patient perceptions suffering accordingly. Whether this proves an issue for your practice will depend on your branding, services, and patient mix.
The Pros and Cons of Retail Space
The rise of “med-tail” has come about for a reason. Retail spaces offer numerous benefits for growing medical practices, including:
- Appealing retail storefronts. Former storefronts offer great visibility, as well as signage opportunities, exposure on major roads, greater footfall, and ample parking. This can be a great option for practices with large amounts of walk-in business, such as urgent care practices.
- Proximity to other businesses. Being located among other high-demand businesses offers a convenience factor that patients continue to prioritize. If your new space is close to a pharmacy, restaurants, grocery stores, and shopping, patients may be more incentivized to make the trip.
- “Backfill” of retail buildings. As malls address changes in consumer behavior, many are redesigning to accommodate simple medical clinics such as optometry and physical therapy spaces – often at more affordable rates. In fact, many new mixed-use centers are now designed with spaces for medical providers in mind.
There are some potential negatives to setting up your practice in a retail space, such as:
- Cost. Retail spaces are significantly more expensive than office spaces, in large part due to their size, visibility, and location. If your patient pool is drawn from referrals, or your business doesn’t otherwise need to be highly visible, a retail space might not make sense financially. Additionally, some retail “extras,” such as parking or signage, might be more than your business actually needs, and lease terms traditionally have lower tenant improvement caps.
- Alignment with patient base. Before negotiating a retail lease, consider how your patient base might react to a less traditional space. For some businesses, a more traditional, familiar space may be the better option – although the type of retail space in question will be a factor here. A space in a strip center will feel more traditional than a large space in a mall, for example.
Questioning Office vs Retail Space? Talk to GZ!
If you’re torn between office and retail space for your medical practice, talk to the team at Gittleson Zuppas Medical Realty. As medical real estate specialists, we can help you break down the core needs of your business – and help you identify a space that will help your medical practice thrive. For more information, get in touch today!