SEATTLE—The vacancy decline in medical office buildings since the peak of the recession hasn't been as great as that of conventional office properties, but then MOB occupancies didn't fall as far and therefore had a shorter and more gradual climb back up. As it is, the sector's vacancy rate averages now 10.9%, the lowest since the recession, according to Colliers International. However, it tends to be higher in older properties.

“Relative to both CBD and suburban traditional office, medical office proved to be a tighter and more stable property type during the recession and recovery,” according to the Seattle-based firm's 2015 Medical Office Outlook Report. Among the factors contributing to stability are long lease terms along with the expense of money and time to make tenant- and specialty-specific improvements to a space. “Such factors often deter tenants from relocating,” the report states.

The sector's relative stability occurs against the backdrop of what Mary Beth Kuzmanovich, the firm's national director of healthcare services, calls “an enormous transition period” for the healthcare industry itself. She cites the ongoing uncertainty over the effects of the Affordable Care Act, as well as “advances in technology and the graying of our population.” In the face of this, she says, “the demand for healthcare real estate is rising, especially for the properties that are best suited to meet sector-wide needs for lower-cost and more convenient locations."

That's leading to what Colliers calls the “retailization” of healthcare real estate, as physicians and providers alike look beyond hospital campuses. “Providers such as One Medical Group are locating in ground-floor and second-floor urban retail spaces in office buildings as well as mixed-use residential buildings for the convenience of their consumer base,” according to the Colliers report.

Other health systems have begun "clustering multiple physicians and medical specialties such as urgent care centers and dialysis clinics in suburban shopping centers convenient for both physicians and consumers,” the report states. Technology, too, is a driver of the movement of medical services out of the hospital and into outpatient and retail settings “as treatments and diagnostics such as digital imaging have become more mobile.”

There's another, more literal aspect of retailization cited in the report, and that's the greater involvement of actual retail stores. “Changes in healthcare are attracting new participants to the space, notably pharmacies and grocery stores offering basic services such as vaccinations and treatment for common, non-acute illnesses,” the report states. Such walk-in clinics can provide convenient care, generally at a lower cost than a traditional doctor's office or urgent care center, as well as transparent pricing.

Further, Colliers notes that some hospital systems have begun partnering with retail clinics to provide low-acuity services to existing patients at a lower cost, with the MOB report citing Texas Health Resources' mid-2014 announcement of an alliance with multiple Dallas-Fort Worth-area CVS Minute Clinics. “Minute Clinics is the current leader in the retail clinic market with over 900 locations and an additional 600 planned through 2017,” the report states. Additionally, Kaiser Permanente, California's largest HMO, recently announced a partnership with Target to open clinics in several of its Southern California stores “with plans to expand into other states in which Kaiser operates.”