When Atkins Cos. and Woodmont Properties developed Washington Square Town Center — a mixed-use, partially completed 35-acre joint venture in Gloucester County’s Washington Township — the two real estate companies wanted to find anchors that would resonate with potential residents. Their decision: supplement 30,000-square-feet of retail space with health care components, including the 40,000-square-foot Rothman Medical Building and a 110-unit assisted living facility. It’s part of a broader, demographic-driven trend of integrating medical facilities into mixed-use and other developments.

“Demographics, including aging baby boomers, played a big part in this,” according to Chick Atkins, a principal at Atkins Cos. “People are not getting any younger, and more of them need more access to health care. Next door to our site is a 250,000 square-foot Virtua Wellness Center. “So this is a medical hub.”

A medical-retail link

And while it might not seem obvious, there’s a tie-in between medical and retail, he added. “Increasingly, health care today is taking branding cues from retailing. Medical and other health care providers want their signage to be seen and recognized. They want brand recognition the way retailers want it. Also, increasingly, medical providers want to be close to their client base, so their patients’ commute is a lot easier.”

Atkins said his real estate development company has done “a lot of medical and a lot of mixed-use, but this is the first ground-up combination we’ve done with both. We believe that these kinds of semi-urban multi-use projects make a lot of sense, and we expect to do more of them.”

One challenge, though, could be the lack of developable space in New Jersey. “There just aren’t many areas left for large-scale mixed-use projects,” he said. “But the Fort Monmouth redevelopment could be a possibility.”

Overall, Atkins sees medical as the next big thing. “We’re moving away from general office development,” he noted. “I like medical because it’s more stable than general office. A few years ago we bought the old Bank of America building on Route 22 in Bridgewater. Hunterdon Healthcare System has about 55,000 square-feet there, and when Bank of America vacates its 40,000 square-feet when the lease runs out our plan is to infill it with more medical, so it’s a purely medical building.”

The growing demand for a health care component in real estate development was on display late last year, when the real estate services company Cushman & Wakefield inked three medical office leases in Franklin Lakes at a building in the then-new 32,500-square-foot Franklin Lakes Towne Square development.

Billed as the only new facility in Bergen County designed for medical-retail mix, Metro Eye Care, Ramsey Sport and Spine, and Bergen Oral Surgery took long-term leases, according to Jeffrey Prezant, senior director of Cushman & Wakefield’s Health Care Practice Group.

“The design is based on careful study of this market and built to accommodate market needs, with both medical and retail businesses identified as high among those needs,” Prezant said, adding that the practice group’s clients span the full range of organizations in the health care sector. “This is the only new building that combines the three uses into an integrated retail medical center. The building features a private lobby entrance with a stretcher-ready elevator as well as a parking lot for 175 vehicles.”

Expect to see more

This property is part of a larger trend, he said. “When hospitals own many different medical specialty groups, they try to offer ‘one-stop medical shopping’ for patients. The building at Franklin Lakes Towne Square was a purpose-built facility with retail in front, and dedicated medical office space in the rear. It’s close to parking, and the stretcher-grade elevator conforms to medical regulations. There’s a total of 18,000 square feet of retail on the ground floor and 14,000 square feet of medical on top with its own entrance, signage and identity.”

In a bid to get closer to patients, an increasing number of medical groups are looking at shopping centers, according to Prezant. “But many don’t have the oversized elevators that are necessary under new medical-construction requirements. So often, they’re restricted to the ground floor. We did a deal with a large medical group in Rockland County, N.Y. that took first-floor space in a shopping center. Hospitals and other members of the medical community like to go where the patients are.”

So the next time someone shouts, “Is there a doctor in the house?,” the answer is likely to be ‘Yes, what kind of specialist do you need?”

This article was updated at 5:35 p.m. EDT on Aug. 15, 2019 to correct a reference to the former Bank of America building on Route 22 in Bridgewater. Atlantic Health System no longer occupies space there.