In a recent webinar hosted by George Ozoude, MD, CEO of Time Health Capital, and Adebayo Fasanya, MD, CEO of Dr. Breathe Easy Capital, guest expert Steve Salvigsen, Managing Partner at Sage Square Capital, shared valuable insights into an often-overlooked real estate asset class: Mixed-Use Medical and Retail Centers, commonly known as Medtail.
These properties, which combine healthcare tenants with traditional retail businesses, offer a unique blend of stability, cash flow, and long-term value appreciation. For physicians looking to diversify their investment portfolios and deepen their understanding of real estate, this is an area worth exploring.
What is Medtail Real Estate?
Medtail properties bring together medical office tenants (outpatient clinics, dental practices, and specialty care providers) and retail tenants (coffee shops, hardware stores, pharmacies, and service businesses) within one center.
These properties typically range from 35,000 to 100,000 square feet and house 7–10 tenants, offering a balanced asset that caters to essential services and community needs.
Why Physicians Should Pay Attention
Throughout the webinar, Steve Salvigsen answered questions and offered key reasons why Medtail properties can be attractive to investors—especially those in healthcare:
1. Recession-Resistant Tenants
Medical providers tend to be long-term, stable tenants. Once established, they rarely relocate due to high build-out costs and patient continuity needs. Multi-year leases (5, 10, or even 20 years) are common, providing predictable income streams.
2. Built-in Diversification
A blend of medical and retail tenants offers natural diversification. Medical tenants generate consistent foot traffic that supports surrounding retailers. If one sector faces temporary challenges, the other can provide resilience.
3. Triple Net (NNN) Leases Reduce Landlord Burden
Many tenants sign triple net leases, where they cover property taxes, insurance, and maintenance. This structure reduces operational responsibilities for owners while maintaining stable returns.
4. Higher Yields with Less Competition
Compared to highly competitive multifamily markets, Medtail centers often offer higher cap rates (7–9%), translating to stronger cash flow. Additionally, there is typically less investor competition in this niche asset class.
How Sage Square Capital Selects Markets
Steve Salvigsen shared Sage Square Capital’s macro-first approach to selecting markets. His team focuses on secondary and tertiary U.S. markets that demonstrate long-term economic growth potential—often near expanding ports and infrastructure projects.
Markets like Savannah, Mobile, and Charleston were highlighted as examples of areas benefiting from increased logistics activity and population growth. According to Salvigsen, these markets present a 10–15 year runway of economic expansion, which supports tenant stability and property appreciation.
The Strategic Advantages of Medtail
Steve emphasized several reasons why this asset class may appeal to physicians and other investors:
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Stable Income: Medical tenants typically anchor the property and provide long-term, reliable cash flow.
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Upside Flexibility: Retail spaces offer opportunities for lease renegotiation and value-add improvements.
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Resistance to E-commerce Disruption: Tenants like medical providers, hardware stores, and service-based businesses offer services that are less vulnerable to online competition.
By combining both sectors, Medtail centers balance stability with growth potential.
Final Thoughts
The discussion with Steve Salvigsen shed light on how Mixed-Use Medical and Retail properties can provide a stable, diversified, and cash-flowing real estate option for those seeking to expand their knowledge and portfolios.
For physicians accustomed to healthcare’s stability, understanding how similar principles apply to real estate investing—particularly through assets like Medtail—can be an empowering next step.
Want to connect with our community for more educational opportunities?
📺 Watch the full webinar here, hosted by George Ozoude, MD and Adebayo Fasanya, MD, featuring guest expert Steve Salvigsen. You’ll learn firsthand how Medtail properties work, what to look for in markets, and how seasoned investors evaluate these deals.
👉 Watch the Webinar on YouTube