Jonathan Hipp

Drugstores have always been a big part of retail real estate's net lease sector. After all, Walgreens and CVS have thousands of stores across the country relied on by investors.

Besides these usual suspects, there is also a crop of urgent-care clinics that are becoming increasingly relevant in the net lease world.

Both developments continue to pick up steam and are good news for the sector.

This “doc-in-a-box”, or retail-clinic trend, gives consumers additional reasons to make trips to net-lease properties.

The in-store facilities, which are found in major drugstores and large discounters such as Walmart, average 200 square feet, are usually clinics run by doctors, or health systems, and lease the space from the retailer, typically near the pharmacy department. They offer services, provided by registered nurses and physician assistants, that include vaccinations, physicals and are able to treat minor injuries and illnesses.

By contrast, urgent-care facilities are operated directly by a health group, have physicians on staff that can treat more serious maladies. Most of these businesses provide the same services as clinics in retail stores, but they can also give X-rays, do lab work and offer more complete health diagnostics.

The upside for consumers is that they have more choices for healthcare and don't have to sit in a waiting room for extended periods of time to be seen by a health professional. In the case of clinics situated in existing retail stores, people can shop, boosting sales in different areas of the store.

A report by consulting firm Accenture predicts a boom in retail clinics, as well as urgent-care facilities in years to come. It's forecast that by next year, there will be just more than 2,800 of these in stores, a whopping 47-percent jump from 2014. Urgent-care clinics number upwards of 7,100 locations across the country, though not all of these are in retail environments.

On the in-store end, CVS is by far the market share leader, with its MinuteClinics, accounting for about half of all “doc-in-a-box” facilities in the United States, with just over 900. Walgreens Healthcare is second, with about 450, and just under 25 percent. Right now there are 41 states, and Washington, D.C., which allow for retail clinics within their borders.

Though larger in numbers, urgent-care facilities are more fragmented. The largest chain is Concentra Urgent Care, with just over 300 units; followed by U.S. HealthWorks, at about 200 locations; and American Family Care and Doctors Express, which has just under 200.

An exhaustive retail-clinic study funded by the Robert Wood Johnson Foundation last year, says there are plenty of reasons this expansion is taking place. First of all, the enactment of the Affordable Care Act has increased the demand for primary care physicians, which are in short supply. This wider consumer base is attracted to retail clinics because of shorter waiting times than at a typical doctor's office, no need for an appointment, and other reasons.

About 10.5 million patients visited retail clinics in 2004, up from 1.5 million in 2006. With the expected increase in overall clinics, this number should only shoot up more.

Of course, this undoubtedly leads to a jump in traffic at the stores where the clinics lease space, or in the case of urgent care, are situated near.

These developments are exciting for net-lease investors and give consumers more reasons to frequent these assets.

Jonathan Hipp

Drugstores have always been a big part of retail real estate's net lease sector. After all, Walgreens and CVS have thousands of stores across the country relied on by investors.

Besides these usual suspects, there is also a crop of urgent-care clinics that are becoming increasingly relevant in the net lease world.

Both developments continue to pick up steam and are good news for the sector.

This “doc-in-a-box”, or retail-clinic trend, gives consumers additional reasons to make trips to net-lease properties.

The in-store facilities, which are found in major drugstores and large discounters such as Walmart, average 200 square feet, are usually clinics run by doctors, or health systems, and lease the space from the retailer, typically near the pharmacy department. They offer services, provided by registered nurses and physician assistants, that include vaccinations, physicals and are able to treat minor injuries and illnesses.

By contrast, urgent-care facilities are operated directly by a health group, have physicians on staff that can treat more serious maladies. Most of these businesses provide the same services as clinics in retail stores, but they can also give X-rays, do lab work and offer more complete health diagnostics.

The upside for consumers is that they have more choices for healthcare and don't have to sit in a waiting room for extended periods of time to be seen by a health professional. In the case of clinics situated in existing retail stores, people can shop, boosting sales in different areas of the store.

A report by consulting firm Accenture predicts a boom in retail clinics, as well as urgent-care facilities in years to come. It's forecast that by next year, there will be just more than 2,800 of these in stores, a whopping 47-percent jump from 2014. Urgent-care clinics number upwards of 7,100 locations across the country, though not all of these are in retail environments.

On the in-store end, CVS is by far the market share leader, with its MinuteClinics, accounting for about half of all “doc-in-a-box” facilities in the United States, with just over 900. Walgreens Healthcare is second, with about 450, and just under 25 percent. Right now there are 41 states, and Washington, D.C., which allow for retail clinics within their borders.

Though larger in numbers, urgent-care facilities are more fragmented. The largest chain is Concentra Urgent Care, with just over 300 units; followed by U.S. HealthWorks, at about 200 locations; and American Family Care and Doctors Express, which has just under 200.

An exhaustive retail-clinic study funded by the Robert Wood Johnson Foundation last year, says there are plenty of reasons this expansion is taking place. First of all, the enactment of the Affordable Care Act has increased the demand for primary care physicians, which are in short supply. This wider consumer base is attracted to retail clinics because of shorter waiting times than at a typical doctor's office, no need for an appointment, and other reasons.

About 10.5 million patients visited retail clinics in 2004, up from 1.5 million in 2006. With the expected increase in overall clinics, this number should only shoot up more.

Of course, this undoubtedly leads to a jump in traffic at the stores where the clinics lease space, or in the case of urgent care, are situated near.

These developments are exciting for net-lease investors and give consumers more reasons to frequent these assets.

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Jonathan Hipp

Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.

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