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Ozempic Could Be The Next Big Curveball For Commercial Real Estate

What does the widespread consumption of a juggernaut drug have to do with commercial real estate? 

More than meets the eye, and the industry should start preparing for a potential upheaval in the not-too-distant future, a growing number of real estate professionals say.

Diabetes drugs being prescribed for weight loss, like Ozempic and Mounjaro, are already altering consumer purchasing habits. In the short term, the retail sector is in line to adjust first. But widespread adoption of the drugs, known as GLP-1s, could have far-reaching and surprising implications for asset classes from housing to healthcare and beyond.


Nearly 24 million people, or roughly 7% of the population, are slated to be taking appetite suppressants by 2035. That has prompted longtime industry insiders like Roy Oppenheim to brace for what they believe could be the biggest disruption to real estate since the pandemic, on par with emerging and revolutionary technologies like artificial intelligence.

“After Covid, this will be the next big impact,” said Oppenheim, a real estate lawyer, partner and co-founder of Oppenheim Law in South Florida who has taken a keen interest in the relationship between the adoption of GLP-1s and commercial real estate.

A heightened focus on health and wellness brought on by the widespread use of semaglutide and tirzepatide, the active ingredients in the Type 2 diabetes drugs often prescribed for weight management, could alter both the tenant mix and configuration of retail developments, according to Anton Pil, global head of alternatives for J.P. Morgan & Co.

And developers, landlords and brokers should pay close attention to who their target audience is and how their preferences might shift as a result, he said at a Jan. 11 state of retail event held by Texas-based firm Weitzman

“Over the next five to 10 years, the spending patterns of that cohort will change dramatically … alcohol sales will probably be struggling, fast food sales are going to have to morph,” Pil said.

“If 10% of this country goes on these drugs, sales of a lot of major companies are going to decline and they’re going to decline pretty dramatically.” 

Walmart executives have already noticed a link between Ozempic and a decline in food sales. Other major food manufacturers are devising plans to respond to dietary changes caused by the drugs, with food giant Conagra, manufacturer of brands such as Duncan Hines and Marie Callender's, creating an internal crack team to respond to changing behavior. 

In the CRE sphere, grocery stores may become smaller as sugary items are pulled from the shelves, Oppenheim said. Athleisure stores like Lululemon and Nike could become even more prevalent, and fast food chains like McDonald’s might be replaced with healthier, fast-casual options.


“Ultra-processed foods are on the way out,” Oppenheim said. “You’ll see more Whole Foods, more salad places … and [developers will] have to consider giving people more walking opportunities.”

Along those lines, malls could get a much-needed boost in foot traffic, said Emilie Paulson, vice president at Weitzman. 

“When people lose weight, they want to show off their success,” she said. “If enough people lose weight, I think you will absolutely see an uptick.”

Weight-loss drugs can reduce daily calorie intake by as much as 30%, according to a Morgan Stanley survey of more than 300 patients. As more Americans take obesity drugs, overall consumption of carbonated soft drinks, baked goods and salty snacks could fall by as much as 3% by 2035, the survey found.

“You lose 15% to 20% of your weight, and it changes your buying patterns and your consumer patterns,” Pil said, noting that his own analysis of anonymized spending data from 95 million Chase customers had already revealed a shift away from fast food, snacks, soda and alcohol. 

Further down the road, behavioral changes may also impact the housing market, Oppenheim said. A renewed commitment to health could lead people to prioritize access to the outdoors or exercise facilities when choosing where to live.

Those same individuals may feel more comfortable socializing and prefer more communal types of living, which could provide a boost to the apartment industry if owners are savvy, he added.

“You’ll see that people are going to want to live in different types of areas,” he said. “Not as close to a couch but closer to a park or an outdoor activity.” 

By the same token, the drugs could lead to a reduction in demand for medical facilities, he said.

Ozempic and other weight-loss drugs are still inaccessible to the majority of Americans. The drugs require a prescription and are administered by needle, which is a deterrent for many, Oppenheim said. 

But perhaps the biggest obstacle is out-of-pocket cost, with Wegovy, Ozempic and Mounjaro priced between $215 to $700 per month, according to an analysis by The New York Times. More recently, The Wall Street Journal noted costs for the drug had shot up 3.5% to nearly $970 for a month’s supply.

Barriers to access should keep weight-loss drugs from making a noticeable impact on retail real estate in the very near future, Paulson said. And offerings by existing tenants will likely change before the tenant mix itself, she added.

“If insurance companies start covering this and it becomes something that’s over the counter, then we will see a shift,” Paulson said. “But because of the accessibility issues with the expense, there’s just no way for it to affect spending on a grand scale.” 

Oppenheim and Pil disagree. They believe the drug will soon become widely accessible, and that insurance companies will realize it is more cost-effective to pay for weight-loss drugs than it is to treat diabetes and other obesity-related illnesses.

“Insurance companies will very quickly do the math,” Oppenheim said.