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Medicine at the Mall

Lola Butcher, for HealthLeaders Magazine, January 13, 2009
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Transforming dated shopping centers into satellite campuses can help hospitals save money and expand their reach in the community.

When Vanderbilt University Medical Center executives first considered locating services in an aging Nashville shopping center, the price of the property is what caught their eye.

"We concluded that we could get medical clinic space and office space at this location at a much less expensive rate than what we were paying to build on our main campus," says C. Wright Pinson, MD, associate vice chancellor for clinical affairs.

As they looked at the partly vacant retail complex—Nashville's first enclosed shopping center—more closely, the cost became only one of its attractive attributes. Construction on 440,000 square feet of leased space began in 2007 and, when it is completed in April, Vanderbilt Health at One Hundred Oaks will boast nearly 20 clinical programs and nearly 750 Vanderbilt employees.

Vanderbilt's vision for a second campus in a shopping center is one that is increasingly shared by medical center leaders around the country. "It's a type of real estate development that we're going to be hearing more about in the future," says Don Hunter, president of Hunter Interests, a national real estate development and consulting firm based in Annapolis, MD.

Hunter points to two trends driving the development of so-called "medical malls." As communities sprawl ever larger, retailers chase their customers into far-flung suburbs, leaving older shopping centers to languish. "Just about every community that's had any kind of growth has these shopping centers that are toward the center of the metropolitan area because they were built years ago, and they're not performing well," Hunter says.

Meanwhile, hospitals want to make their ever-growing outpatient services more convenient for their patients. Aging shopping centers, located in older residential areas not too far from center-city hospitals, are willing to offer attractive terms to hospitals that need large amounts of space and long-term leases.

"There's going to continue to be strong demand for locating medical service facilities near residential areas, where the people are," Hunter says.

That, in fact, became a primary reason for Vanderbilt to stake a claim at One Hundred Oaks. As Vanderbilt grows, traffic problems getting to and from the hospital grow with it. The mall, located right off Interstate 65, offers easier access for patients coming from the medical center's wide service area.

And then there is the parking issue.

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