The commercial real estate landscape in Houston is experiencing a significant change, driven by an emerging trend that’s altering how healthcare providers think about location and patient access. Medical retail—the practice of locating healthcare services within shopping centers and retail environments—has become a dominant force in the post-pandemic market, changing both patient behavior and physician practice strategies.
This shift reflects a broader evolution in healthcare delivery that prioritizes convenience, accessibility, and patient experience. As traditional hospital-based care models face new challenges, medical professionals are increasingly turning to retail settings to meet patients where they are, creating opportunities and challenges for commercial real estate professionals specializing in this niche.
From Medical Sales to Real Estate Expertise
Jennifer Zaky, Commercial Real Estate Specialist at S&P Interests, exemplifies how industry expertise can create specialized market opportunities. After twelve years in medical sales, working with specialists, Zaky transitioned to commercial real estate five years ago with a clear advantage: deep understanding of the medical industry.
“I came from a medical background. I worked in the medical industry for about twelve years,” Zaky explains. “When I was working in real estate in the beginning, I thought, okay, what do I know? I know doctors. So that’s where my journey started.”
This background proved invaluable as she began calling on contacts from her previous industry. Her first major initiative was creating what she describes as “the first-of-its-kind” resource—an event that brought together physicians interested in learning about commercial real estate. The response was immediate and overwhelming.
“We brought invited physicians and our first month advance we had like 50 or 60 attendees, which is amazing. We did not expect that and it was all doctors who were very interested in learning about commercial real estate,” Zaky recalls.
The survey results from that initial event revealed significant market potential: 100% of attending physicians expressed interest in either entering private practice or pursuing real estate investment opportunities, indicating an untapped market for specialized commercial real estate services.
The Post-Pandemic Shift to Medical Retail
The COVID-19 pandemic accelerated changes that were already beginning to affect healthcare delivery. Patients, who had grown accustomed to avoiding large hospital systems, began seeking more convenient healthcare options.
“After COVID, a lot of things changed for patients and they didn’t love to drive to the hospital settings,” Zaky observes. “They wanted to go to the grocery store, get their nails done, go to the dentist, or go to their family medicine doctor—they didn’t want to go drive to the hospital.”
This preference shift created what Zaky terms “medical retail” —healthcare services integrated into shopping centers and retail environments. The concept addresses multiple patient concerns: convenience, visibility, accessibility, and reduced association with emergency or crisis care.
“Going to the doctor is easier when I go into a shopping center,” Zaky notes. “The idea of going to a hospital system turned into more of an emergent situation.”
The benefits extend beyond patient convenience. For physicians, retail locations offer increased visibility, consistent foot traffic, and the ability to serve patients in a more relaxed, less clinical environment. The model has proven particularly successful for specialties that benefit from high visibility and convenient access.
Competitive Advantages in a Specialized Market
Working with S&P Interests, a family-owned boutique firm, Zaky competes effectively against larger national brokerages by leveraging both her medical background and the flexibility of a smaller organization.
“The nice thing about working for a boutique firm and not a large company is when you ask an agent or a broker, we have the ability to do everything,” Zaky explains. “So I can do a landlord or tenant rep for medical that can pivot to something else many times.”
This versatility proves valuable when working with physicians who may be interested in multiple real estate opportunities beyond their practice needs. Her medical background provides additional credibility and insight. “I had been in clinics, hundreds of clinics. So I know exactly what a patient sees, how a nurse’s station works, what the flow of a clinic looks like,” she explains.
Data-Driven Site Selection
The success of medical retail depends heavily on demographic analysis. Zaky’s approach involves comprehensive evaluation of multiple data points specific to healthcare services.
“When we do our evaluation, I’m going to speak specifically to this, and because I think it’s important to note, we go through a lot of their demographics, such as insurance mix, medical insurance mix, household demographics, how many kids, even what consumers spend on health and beauty,” she explains.
This analysis allows for precise site selection that considers factors unique to medical practices. Medical retail requires understanding of insurance coverage patterns, household composition, and healthcare spending behaviors.
The approach has proven particularly effective in emerging markets where demographic trends indicate future growth potential. Zaky identifies areas like Magnolia, Fulshear, and Richmond as emerging markets with significant medical user influx.
Market Trends and Specialty Focus
The medical retail trend has created distinct patterns in terms of which specialties are experiencing the most growth. Cash-pay services have emerged as particularly well-suited to retail environments.
“Dentistry, family medicine, dermatology, medical spas—any specialty type that takes a cash payment, a cash patient, typically sees the most increase,” Zaky notes.
This trend reflects both the convenience factor of retail locations and the business model advantages for practices that don’t rely heavily on insurance reimbursements. Cash-pay services can operate more efficiently in retail environments, with lower overhead costs and greater scheduling flexibility.
The success of medical retail has also influenced broader commercial real estate trends. Entertainment and experiential retail have gained prominence as consumers prioritize activities and experiences over traditional shopping.
“After the pandemic, consumers primarily focused on entertainment after being home for weeks. People didn’t really care what they were wearing, they wanted to have fun with their families.”
Case Study: Lifetime Plaza Success
The Lifetime Plaza development exemplifies the successful integration of medical and retail uses. The project, featuring two 10,000-square-foot buildings, positioned itself to capitalize on major healthcare developments in the area.
“During that time, MD Anderson purchased nine acres across the street. I think Methodist also bought something—they opened a medical complex across the street. So there was a big influx of medical users that came to the area,” Zaky explains.
Rather than competing directly with these major healthcare facilities, the development team made a strategic decision to create complementary uses. “We decided instead of trying to do a complete medical complex, let’s do one complex of food and beverage and one that’s medical so that they can kind of share their tenant mix.”
The result was Building A, focused on food and beverage tenants, and Building B, dedicated to medical users including dermatology, dentistry, and infusion therapy. This mixed-use approach created synergies between different tenant types while serving healthcare professionals and patients from the major facilities.
Challenges and Opportunities
Despite the growth in medical retail, significant challenges remain for physicians considering private practice. Many medical professionals lack business training, creating hesitation around practice ownership.
“What I’ve noticed is, when I talk to a lot of these physicians, especially ones that are coming out of college, they’re not equipped with how to run the business and operations of their practice,” Zaky observes. “So they learn all this stuff about being a doctor but not a lot about being a business owner.”
This knowledge gap creates demand for comprehensive advisory services that extend beyond traditional brokerage. Construction costs are another challenge. Medical build-outs are among the most expensive in commercial real estate, requiring specialized infrastructure. “The medical build-out is one of the most expensive build-outs in commercial real estate. It’s not just a white box. It requires plumbing and rooms and X-ray rooms and there’s a lot of intricacies,” Zaky explains.
However, tenant improvement allowances and long-term lease commitments help offset these costs. Medical tenants typically sign 10-year lease terms and frequently renew, providing stability that appeals to developers and landlords.
Future Market Outlook
Looking ahead, Zaky remains optimistic about the continued growth of medical retail. The trend appears to be more than a temporary pandemic response, representing a fundamental shift in how healthcare services are delivered and accessed.
“I think the next 24 months are going to be pretty telling for us. I feel pretty optimistic, if I’m being honest,” she says. “I think in a positive way. So I’m looking forward to seeing what retail looks like and medical retail specifically in the next 24 months. But I do find that this trend, I don’t see this going away.”
The sustainability of medical retail is supported by continued patient preference for convenience, physician recognition of business advantages, and the proven success of early adopters. As more medical practices succeed in retail environments, the model is likely to expand to additional specialties and markets.
Strategic Recommendations
For medical practices considering retail locations, Zaky emphasizes the importance of comprehensive research and professional guidance. “Do your research, check your demographics, check to see what new emerging markets where people are moving. I always think that it’s important to check where big retailers are going, so if you see national retailers going somewhere that’s always a good indicator.”
She also strongly recommends that physicians work with business consultants to navigate the complexities of practice ownership. “The physicians I work with that hire business consultants tend to do pretty well. There is a cost that comes with it, but I think that business consultants are great for physicians.”
For developers, medical tenants offer distinct advantages despite higher build-out costs. “Physicians are great. They do minimum ten-year lease terms, they always re-sign,” Zaky notes. “Any time I drive by and see a doctor’s office, I see them there for ten, twenty, thirty years. And when that doctor leaves, I see another doctor come.”
The medical retail trend represents a significant evolution in both healthcare delivery and commercial real estate. As patient preferences continue to favor convenience and accessibility, and as physicians recognize the business advantages, this sector is positioned for continued growth. Success in this market requires specialized knowledge, comprehensive demographic analysis, and understanding of the unique needs of medical tenants—expertise that professionals like Zaky have developed through deep industry experience and focused market specialization.
