Physician offices to serve as major tenants in "mall"

A California developer says his new project will be a mix of health care and retail, figuring stores can benefit from patient traffic.

By Tyler Chin, AMNews staff. Feb. 5, 2007.

In a twist on the traditional shopping mall concept, a real estate developer is opening what he calls a mall, in southern California, that will be anchored by medical offices whose presence will be used to lure retail businesses.

Providence Medical Center, a $50 million, 125,000 square-foot development in a suburban area of Fullerton, Calif., will be 70% filled by medical offices and 30% by retail stores, said Thomas LeBeau, chief executive officer of Accretive Realty Advisors Inc., a Newport Beach, Calif., company behind the project.

What is unusual about the project is that malls typically are anchored by a well-known department store, whose goal is to drive traffic to the mall.

The International Council of Shopping Centers, however, doesn't consider the project a mall because its retail component makes up a minority rather than a majority of the use, said Patrice Duker, a spokeswoman for the New York-based trade group.

Still, its mixed-use nature reflects a growing trend among new mall developments for the past year, Duker said. "We've seen some centers who have chosen to go the nontraditional route in regards to both tenant mix and also anchor tenants," she said. A handful of malls across the country have medical buildings in them, but not as anchors, she said.

But LeBeau said that's what he is doing. He said is pitching the project to retailers and doctors as a way to attract baby boomers who are "going to their physician more often not because they are unhealthy, but because they want to stay healthy."