Medical complex gives retail a shot
Will patients visiting their medical center for a CT scan or a flu shot also stay for lunch or some shopping?
Thomas LeBeau thinks so.
The Newport Beach developer is building a $50-million project in Fullerton that will be part doctors’ offices and part shopping mall -- one of a growing number of such medical complexes in Southern California.
In LeBeau’s vision, patients would come for medical appointments and perhaps meet a friend for lunch or browse for skin-care products. To encourage browsing and eating, the doctors’ offices will have small waiting rooms and patients will be given pagers that alert them when the doctor is ready to see them.
“Everyone in Southern California seems to always be multi-tasking,” said LeBeau, chief executive of Accretive Realty Advisors Inc., which is building the project next to St. Jude Medical Center north of downtown. “We always want to take care of two, three things in one trip.”
But whether patients will prove good retail customers remains to be seen.
“Many people who are going to see their doctors are having the worst day of their lives,” said Michael R. Lombardi, president of Stonebridge Holdings Inc., a medical complex developer based in Century City. “They’ve got allergies or they are getting chemotherapy.... I don’t think they are coming to have a good time shopping and dining.”
Having a doctor’s office next to a restaurant or a pet store is nothing new. Go to any strip mall -- particularly in Southern California -- and there’s a good chance you’ll find a dentist or eye doctor mixed in with a fast-food joint or a hair salon.
But in those strip malls, the doctor’s office is just another tenant. LeBeau takes the concept much further by having the doctors’ offices serve as the anchor, in the same way that a Nordstrom or Macy’s department store might be the main tenant in a shopping center.
So far, the mall portion of Fullerton’s 100,000-square-foot Providence Center is slated to house a modest pair of contemporary restaurants and a skin treatment spa, but LeBeau hopes to attract other convenience retailers, such as sunglass stores, cellphone shops and a gym.
“I’ve been looking at several [lease] spaces and this is perfect,” said Renee Cobos, a dermatologist who signed a pre-lease for Providence Center and plans to open a clinic and a medical spa offering products and cosmetic treatments, such as Botox and peels.
Traditionally, medical complexes in Southern California have been singular in their focus on healthcare services with little space devoted to retail.
But single-use developments are gradually fading away as planners opt for a higher concentration and variety of commercial uses -- sometimes coupled with residential projects -- as an antidote for sprawl and traffic jams. The less people travel to get their errands done, the less time they will spend in their cars.
A handful of Southern California developers, from the Inland Empire to San Diego County, are building medical office complexes that offer more than the usual coffee shop and newsstand.
“When people are not feeling well, it is even more important to add a little better experience,” said Tony Guanci, a partner in an Oceanside development called Vista del Oro Health Center. The 50,000-square-foot project, awaiting city approval, would have an outdoor patio and food court overlooking the ocean. “You might have 300, 500 people in this facility in the course of the day.... We want them to come, grab some lunch, read the newspaper, maybe get a shoeshine.”
Low vacancy rates for medical office space in places such as Orange County and West L.A. also are fueling a building boom, real estate brokers and consultants say. With little vacant land left in the region, many new medical buildings are ending up near existing retail centers.
Stonebridge Holdings is seeking approvals for a mixed-use development in West Los Angeles, near Olympic Boulevard and Bundy Drive, that includes a 400,000-square-foot medical complex, senior housing and retail. Stonebridge President Lombardi hopes that the medical offices will complement the shops, but not necessarily by providing more customers.
“The parking structure in the medical complex can be used for retail” during off peak hours, Lombardi said. “You don’t see a lot of doctors in their offices on Saturdays and Sundays.”
Providence Center will probably draw additional foot traffic from St. Jude Medical Center, which straddles Harbor Boulevard just to the east. The hospital is undergoing a $50-million expansion that will increase its capacity by more than 60 beds to about 400 by 2008.
LeBeau said that the hospital would provide additional retail customers, but that it was the combination of retail and medical complex that made Providence Center unusual. “You’ve got a whole baby boomer generation that is going to see the doctor more often for preventive care nowadays,” LeBeau said. “They are not necessarily sick patients.”
They might want to do more than read a magazine in the waiting room. They might also bring along a spouse or friend, said Garth Hogan, president of Medical Realty Advisors, the project’s broker.
Hogan estimated that there would be as many as 2,000 visitors daily when the project is completed by the end of this year. It is 60% pre-leased, he said, and tenants include a medical imaging office, an obstetrics and gynecology practice, a surgery center and a couple of national chain restaurants: Z Pizza and Panera Bread.
The complex will have two office buildings and a courtyard for dining and walking. Exteriors will have soft angles and will be finished in wood, aluminum and glass. The feel LeBeau is going for is more luxury hotel and less medical office.
Phil Berry, whose company is charged with finding lease space in Orange County for Panera Bread, said the restaurant chain was attracted by the Providence Center’s looks and location. But it is counting on more than just the medical office traffic to sustain its business.
“It is a combination of the captive audience from the hospital, the daytime trips from the medical office and the surrounding community that is underserved” by eateries, Berry said.
Cobos, the dermatologist, is counting primarily on medical center patients and their referrals to drive most of her spa business.
She specifically requested to have her leased space on the same floor as the gynecology and obstetrics practice. Cobos plans to have product displays that are visible from the hallways.
“I don’t need to advertise as much,” she said. “It is considered bad form to advertise when you are a doctor.”