Approximately 87% of large shopping malls are expected to close over the next 10 years, according to a 2024 report from Capital One bank.
From 2017 to 2022, the number of functioning malls in the U.S. declined by 16.7%, leaving thousands of square feet of vacant building space all over the nation.
However, that space could be beneficial for health systems seeking large, already developed spaces for outpatient care.
Last year, approximately 4% of vacant malls became healthcare, hospital or medical facilities, according to the Capital One report. And that number could continue to grow.
Several ASCs and medical offices have begun moving into vacant mall spaces, including former Sears, Burlington and Lord & Taylor stores.
Major health systems, including New York City-based NYU Langone, have several mall leases, including a multispecialty healthcare facility in a former Sears store in Garden City, N.Y., and a 161,700-square-foot Lord & Taylor store in Manhasset, N.Y., that's being turned into an ASC.
Malls provide opportune spaces for medical facilities, as they often offer plenty of square footage and contribute to increased foot traffic for remaining retail stores. Malls are also often located in densely populated areas and close to major highway systems, making them easy to access for patients.
Since malls are already existent, they also save money for health systems on construction. There is already ample parking available, access to bathrooms, and plumbing and centralized electricity and IT capabilities.
"It's my preference is to find things that are move-in ready or that could be easily converted," Maryellen Westerberg, DrPH, chief operating officer for SAC Health, told Becker's. "I think the timing of that is much more in line with our expansion efforts as a clinic system on the whole. To build from the ground up just feels like an awful lot of moving pieces, and I think we can recycle or reuse a space that has great bones and is conducive to the types of services that we offer."
Connecticut-based Hartford HealthCare has snagged a vacant Bed Bath & Beyond and an old funeral home in the last year, while SAC grabbed a former Wells Fargo headquarters.
Additionally, ASCs and outpatient centers are finding major financial deals when it comes to acquiring former storefronts.
Recently, one real estate firm paid $20 million for an office space in Chicago — 75% less than what it last sold for in 2004.
As interest in shopping malls and in-person shopping declines, real estate developers may be willing to part with old properties at extremely low prices.