The pandemic has been a primary catalyst for this transformative trend. Many office buildings remain underutilized due to hybrid work models. Meanwhile some retail properties are facing high vacancy rates as shopping habits have shifted. Converting these spaces to healthcare-oriented services is a practical solution that also provides care closer to residential areas and shopping hubs, said Colliers.

Also driving this trend is a shift in care delivery models from hospital-centric care to outpatient care, which is creating the need for flexible spaces that accommodate medical technology and patient-centric designs. Retrofitting existing structures is more cost efficient than building new facilities and allows healthcare providers to begin operating more quickly. For property owners, healthcare tenants offer long-term lease stability and the opportunity to revitalize underperforming assets.

“Beyond enhancing access to care, these conversions play a crucial role in creating jobs and boosting local economies," said Colliers. “Obsolete retail spaces, for instance, can be reimagined as vibrant centers for health and wellness, increasing foot traffic and breathing new life into communities.”

There are several considerations for healthcare conversions in retail and office spaces, including rezoning and ensuring compliance with healthcare-specific building codes, such as HVAC standards and patient safety requirements. In addition, healthcare spaces may need infrastructure upgrades to address medical equipment, waste disposal and patient privacy. Community concerns about traffic and noise also should be considered, said Colliers.