MOBs are taking over box stores rather than looking for a few thousand feet in a strip center or regional mall—a result of the healthcare system’s new outpatient and customer-facing model.

Mercy Healthcare Services, repped by Colliers’ Bob Manekin, occupies former grocery stores in Lutherville and Overlea. MedStar has a facility in a former Kmart in Glen Burnie (from discounts to slipped discs), and Kaiser Permanente has similar digs on Washington Boulevard. And Hopkins has proved the viability for 15 years with two MOBs at the boutique retail Green Spring Station.

Bob tells us the buildings don't have lots of separate leases, but rather kind of master-planned facilities with multiple services that share a lobby, check-in, insurance, claims, and other admin. And physicians often do session leases for exam rooms, similar to hoteling in office space. Demand for such space comes from hospital systems looking for off-campus space near rooftops, and it’s made possible by the advancement of electronic medical records.

Box stores already have the needed five parking spaces per thousand SF, and MOB owners can mitigate construction costs (three times that of traditional office) using the existing shells of big stores, Bob says. He gets loads of unsolicited calls about medical tenants from shopping center owners with 20k or 40k SF vacancies. No longer is medical use a stigma to landlords. Medical uses, more so than office or mini storage draw people in to the rest of their retail, such as the Office Depot and PetSmart near the 30k SF former furniture showroom St. Agnes has on Route 40. (Come for the physical, stay for the kibble.)