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Both Investors and Real Estate Executives Agree - ‘Medtail’ Investments Will Surge in 2021


Preventative wellness has become the main priority in recent months. The surge in consumer demand and supplier activity has resulted in a “medtail” surge into the mainstream as a new opportunity for private equity, commercial real estate, and retail healthcare investors. Within those areas, there are 4 key takeaways that lead us to believe that medical retail is already taking off in 2021.


Key Takeaway #1: More than 75% of private equity, commercial real estate, and retail healthcare professions believe COVID-19 has positively impacted retail healthcare and made it an investment target.


Believe it or not, the medtail movement started well before the pandemic. However, once it hit, it increased the need for faster and more accessible wellness and care options. This is exactly what medtail is designed to solve. This urgency has created more demand, making it an extremely viable investment for private equity and commercial real estate firms.


Key Takeaway #2: Almost 80% of medtail investments will increase within the next year. This increase in investment will create additional opportunities for all.


When these types of healthcare and wellness services take off, it has a ripple impact on landlords, investors, and retail healthcare firms. Landlords look to drive traffic to their centers. Taking a chance on a healthcare tenant is a wise choice as they vacate at a much lesser rate than traditional office spaces, restaurants, or retail shops. This is the perfect opportunity to take advantage of high-profile, convenient brick-and-mortar space that was previously unavailable.


Key Takeaway #3: Half of all commercial real estate executives say the greatest benefit of medtail is that it provides easy access to everyday consumers. The medtail market will help close the real estate gap left by brick-and-mortar retail.


Brick-and-mortar space has been overbuilt with many of these locations severely under-utilized by large, big-box store retailers. As they shutter their stores and rethink their formats, this is the perfect time for developers and landlords to fill those prime real estate spots left behind. It is not only a good thing for surviving retailers who will be less likely to be surrounded by empty storefronts, but it’s also good for commercial landlords and developers trying to find new tenants in these spaces. This is forcing developers and landlords to strategically think about the future of their spaces and the value they hope to create for their tenants and visitors. These spaces should be reimagined so that users can address multiple needs and wants in one trip to a particular destination. The main challenge for traditional and emerging retailers is to provide a unique experience that cannot be replicated elsewhere.


Key Takeaway #4: 80% of private equity, commercial real estate, and retail healthcare professionals believe an omnichannel approach is necessary for medtail.


Consumers are thinking more critically about the ways they venture into a brick-and-mortar location than ever before. This has made telemedicine a critical ingredient for medtail success. For the landlord, these virtual experiences combined with the integration of physical ones can help them to determine the best medtail players to invest in. Two other important factors to consider are scale and market share. Consider the quantitative balance sheet and EBITDA against the differentiation within that prospective tenant category. You may find that although a well-known and recognizable restaurant chain might seem like a good tenant at first, they may have direct competitors nearby, making a medtail tenant such as a pediatric group a safer bet in the long term.



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