Why Investors are Bullish About Medtail – GlobeSt.com

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Even before COVID-19, medical clinics in retail strip centers and large shopping centers, known as medtail, were commonplace. But this trend has only accelerated in recent months and will likely continue throughout 2021, according to Tether Advisors.

“COVID-19 has sped up the inevitability that preventative wellness is no longer a choice,” said Willie Hoag, principal at Tether Advisors. “The retail space is overbuilt, mediocre and redundant. The innovation we’ve seen directed at that space is just the beginning. It’s exciting that a new group of players is filling former retail spots while providing access and convenience to consumers. Most importantly, the convergence could make us a healthier society.”

This broader trend is clear in Tether Advisors’ new 2021 retail healthcare outlook. This outlook is the culmination of Tether research during the second half of 2020 that queried 120 executives who work in private equity, commercial real estate and retail healthcare as well as 100 consumers.

“The overall bullishness about medtail is encouraging, and it might actually understate the opportunities we’re seeing,” said Katie Killeen, vice president of Tether Advisors. “Some obstacles remain–the staffing hurdles most medical retailers face are larger than ever, which is significant as reliable personnel are the backbone of every concept. But the larger trends driving medtail that have been turbocharged by COVID-19 clearly have staying power.”

Stakeholders’ varied perception of convenience is a main theme of this report. But the trend is part  health, part investment, so other findings include what’s ripe for investment, which market segments are seen as most appealing, the emergence of preventative care and questions around value-based care, and omnichannel approaches.

COVID-19 Bolsters Medtail’s Outlook

With this boost from COVID, nearly 80% of private equity, commercial real estate and retail healthcare respondents believe medtail investment will increase in the coming year. Some of this prediction is rooted in the fact that investors have fewer places to safely place money in a pandemic-induced recession. But 2020 has also propelled consumers’ continuing focus and engagement on health and accessibility. An August 2020 report by Deloitte illustrates that focus, outlining that consumers have increased the use of devices to monitor health issues, and measure fitness and health goals.

Convenience is Important

Industry players are focusing more on traditional retail locations to emphasize the importance of proximity and convenience. When asked about the single greatest benefit of expanded medtail offerings, commercial real estate and private equity respondents focused on providing convenient access to everyday shopping, retail healthcare pointed to patient-friendly amenities and consumers mentioned shorter wait times.

Areas Most Primed for Growth

Regarding the types of care that have the most growth potential for medtail, a plurality of private equity, commercial real estate and retail healthcare respondents chose primary care. Commercial real estate and retail healthcare were also somewhat hopeful about counseling and mental health services. Private equity did not share that view, possibly because therapy and counseling have been increasingly conducted remotely during the past year. But experts focused on private equity see a bevy of opportunities across the space, moving past pre-pandemic focuses such as kidney dialysis.

Demographic Breakdown

The 36 to 50 age group was viewed as the age group most effectively served by a plurality of all stakeholder groups surveyed and by 43% overall. Respondents likely surmise that medtail’s convenience will be important for busy working parents.

CRE and Retail Healthcare Agree on Omnichannel Approaches

In another sign of COVID-19’s effects, private equity, commercial real estate and retail healthcare were mostly aligned on the appeal of omnichannel approaches (the combination of telehealth and physical locations). Private equity respondents showed enthusiasm for brands that have embraced an omnichannel approach, particularly in a pandemic environment, saying virtual care now goes hand in hand with physical presence. In addition, a commercial real estate broker said virtual platforms should have physical locations and conversely, retail healthcare brands need to participate in virtual healthcare.

“With the exponential increase of telemedicine and our mobile lab solution, our location counts will be lower, but the quality of the real estate will be more important than ever,” said Jason Madsen, CEO of Atlanta-based Ascend Medical. “We need high-profile class-A sites with convenient parking for our multi-specialty hub centers to serve our patient base.”

Indeed, telemedicine is poised to reach $175 billion in value by 2026, according to Statista.

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