Thinking Inside the Big Box : A SWOT Analysis of Adaptive Reuse for Healthcare Environments

Facing the ongoing challenge of providing accessible, cost effective care for communities, many healthcare systems are turning to adaptive reuse of non-clinical space — often times in vacant big box developments and retail environments. Is this an innovative solution, or a strategy that causes unnecessary headaches? Does adaptive reuse actually save time and/or money, or are there hidden costs? In the end, do these projects make for great healthcare spaces?

As with many things, the answer is, “it depends.” Adaptive reuse comes with significant advantages over new construction; it also comes with surprises and challenges. Helping clients understand the pros and cons and aligning expectations at the start of the process is critical to project success.

These buildings represent a prior investment in the community. As Christina Meyers, NOMA Fellow with LS3P in 2020, explained in her paper Adaptive ReUse of Big Box Stores and Malls, “Many of these buildings represent a time of economic growth and provided for the community with local taxes, jobs, and opportunities for small business development. They also became large central hubs where people could come together, and they shaped how the community physically developed and grew. Most people could not imagine their communities without the addition” Reimagining these facilities for a new chapter of use, then, serves the community as well as the client.

 

Strengths

Adaptive reuse sites, by their nature, are often embedded within the fabric of existing communities. Restaurants and retail sites are typically selected for proximity to the people they serve, so a key draw for adaptive reuse opportunities is location, location, location.  A site that is already located within the existing fabric as an established community presence may encourage better access and trust. When healthcare is more accessible and is located along the paths people travel daily, barriers to access are lowered. Services can be provided within the local community, and specialists can be accessed via telemedicine from local facilities as needed. This approach to providing services locally improves care access and quality while reducing costs for providers and patients alike.

Weaknesses

If location is an undeniable asset, the constraints of the original buildings can quickly become a liability. For clients seeking maximum return on investment, the option to reuse as much of the existing building as possible may seem  to generate significant cost savings. The reality of adapting a building to accommodate a space program for which it was not intended, however, can come with substantial (often unforeseen) costs. Unless the project includes an addition, clients are limited to the existing building footprint, leading to a demanding puzzle to provide space for program needs. In many cases, the building requires extensive demolition, including  “pre-renovating” the building to its core and shell; surgically reconfiguring the slab-on-grade concrete to accommodate new plumbing layouts; and replacing ceilings, light fixtures, and ducts to accommodate new spaces and functions. A new HVAC system is almost always required.

These facilities were typically built quickly, at a low cost, and with one purpose in mind: to move merchandise. The buildings were generally designed with a clear “window shopping” architecture for customers and a “back of house” architecture for storage and service functions, and neither lends itself to flexibility of use or access to daylight. The building envelopes are difficult to modify without dismantling them entirely, making drainage and waterproofing improvements difficult.

Opportunities

Adaptive reuse of vacant properties can also serve as a catalyst for revitalization in the area. Vacant property could be an indicator of economic challenges in a community, making it all the more important to locate healthcare options where they can reach underserved communities. Because they are existing commercial properties, these sites are also typically already developed in terms of infrastructure, circulation, access, and visibility, potentially yielding substantial benefits in terms of minimizing site costs.

These properties also offer exciting opportunities for providers to introduce themselves to a new community. In planting a stake in the ground at a site that is already part of the neighborhood fabric, health systems can create a new “front door” for the community, test new markets and service lines, and quickly create a spoke connecting to a larger system hub. Adaptive reuse projects can help systems deliver a collection of clinics which will serve serve multiple health needs across multiple demographics.

Threats

In most cases, the owner needs to create usable square footage for healthcare services as quickly as possible, so these projects focus on the interior upfit with a “box within a box” approach. The space where providers and patients will spend the most time is the priority for budget and schedule. For providers looking to make a positive impression and build trust within the community at the “front door” to the healthcare system, maintaining brand and community perception will be important to the project’s overall success.  Additional investment in exterior upgrades may yield significant dividends in terms of patient experience.

At the extreme ends of our Southeastern marketplace, rural and urban outpatient health facilities become more prevalent in the healthcare industry as access to care demands increase. As reimbursement for this type of decentralized care becomes the norm for healthcare systems, the market demand for adaptive reuse of “recyclable” facilities is likely to remain strong.  LS3P is prepared to evaluate these buildings and offer the best speed-to-market strategies for their reuse.  Hopefully, they will become the gateway for new construction that offers enhanced patient care and lead toward more patient-centric new construction projects as the market demands.