Step Aside Department Stores – Doctors Want That Big Box: Retail Spaces Become New Frontier For Health Care Expansion

As traditional retail spaces decline, health care providers are moving in—bringing emergency care closer to customers and alleviating pressure on overcrowded hospitals.

Once content to build on the outskirts of cities where land was cheap, providers are now targeting high-traffic retail sites.

“The conversations I’m having today are similar to those I had 20 years ago with retailers—traffic counts, visibility,” said Michelle Brokaw, CEO of FSB Healthcare Realty, during a June 26 panel at the Colorado Hospital, Outpatient Facilities & Medical Office Buildings Summit in Denver.

Retail to Recovery: A Shift in Strategy

Health systems like UCHealth and HCA HealthOne are leading the shift. UCHealth has opened full-service emergency rooms in neighborhoods like Green Valley Ranch and Littleton. HCA HealthOne has launched satellite ERs in Lakewood, Parker, Thornton, and other Denver suburbs.

Despite efforts by Colorado’s Department of Health Care Policy & Financing to curb this trend—in 2021, the agency offered payments to shut down freestanding ERs due to cost concerns—most providers, UCHealth excluded, declined.

Meanwhile, AdventHealth is investing in future demand. In January, it announced an $81 million medical facility in The Aurora Highlands, a rapidly growing development near DIA. Slated to open in fall 2026, the three-story facility will include an ER, clinical spaces, and room for future expansion.

Small, Strategic, and Fast

Most new ERs are intentionally compact and freestanding. HCA, for example, is planning a 12,000-square-foot ER at a former Midas shop in Wheat Ridge, an area previously served by Lutheran Medical Center before its relocation westward.

“The hardest part is just finding sites,” said Darin Long, construction manager at HCA. “They’re not making more land.” HCA is working on 80 ambulatory projects—many using adaptive reuse—and can complete a facility in 8–10 months thanks to standardized designs and prefab components.

Retail locations, especially former big-box stores, are attractive because they offer visibility, square footage, and parking. But the strategy isn’t just about real estate—it’s also about capturing market share.

The Economics of Expansion

Building large hospitals is expensive. Intermountain Health, for instance, spent $685 million on a downsized replacement for Lutheran Medical Center. Meanwhile, freestanding ERs cost around $15 million to build and are often more profitable.

Yet critics argue these facilities often handle non-emergency conditions at emergency-level prices. Urgent care centers could treat many of these cases for a fraction of the cost, said the Denver-based Center for Improving Value in Health Care.

Emergency rooms operate 24/7 and require more staff and technology than urgent care centers, which keep limited hours and offer fewer services. The proliferation of freestanding ERs, critics argue, encourages overuse and drives up state and federal health care spending.

The Future: More Facilities, More Fragmentation

Despite concerns, the trend continues.

“I want to be where the people are,” said Derek Ortner, health care strategy director at Boulder Associates.

That means competing for spots in busy commercial corridors—near stores like Target and restaurants like Chick-fil-A. But decentralization has its costs. Denver once had three Level I trauma centers close to downtown. Now, two have moved miles away, increasing travel times for central-city residents. The shift benefits suburban communities but complicates access for others.

Still, the potential for outpatient expansion is significant. Chris Martin, VP of ambulatory services at Children’s Hospital Colorado, sees growth ahead in specialized areas like orthopedics, infusion centers, and sleep clinics.

Whether freestanding ERs evolve into wellness hubs or continue to focus on emergency care, one thing is clear: the health care landscape is reshaping—one retail site at a time.

Source: Denver Post