Empty retail space is one of the most significant opportunities in American commercial real estate — and healthcare systems have figured it out ahead of most other users. Across the country, former big-box retailers, department stores, and strip mall anchors are being converted into outpatient clinics, urgent care centers, imaging facilities, and ambulatory surgery centers. The combination of surplus retail supply, tight healthcare construction timelines, and favorable location characteristics makes retail-to-medical conversion one of the most compelling adaptive reuse strategies available.
This piece examines what these conversions involve architecturally, what the real case studies look like, what the engineering challenges are, and what the trend means for healthcare facility development in Western North Carolina.
The arithmetic is straightforward. Ground-up medical office building construction in 2024 cost $400–$650 per square foot nationally for a purpose-built outpatient facility — and timelines from site selection to certificate of occupancy typically run 24–36 months. A retail conversion can deliver the same square footage at $200–$350 per square foot in 12–18 months, with the added benefit of an existing building, existing parking, existing utilities, and frequently a location that already has high vehicle visibility and patient-friendly access.
According to Aran McCarthy, a healthcare development specialist at FCA, adaptive retail-to-medical conversions can shorten project timelines “from a few months to a year” compared to ground-up construction (REBusinessOnline, 2023). That timeline compression is not just a financial benefit — it means a health system can respond to patient demand or competitive positioning faster.
The supply side is equally compelling. More than 650 million square feet of vacant retail space existed in the United States as of late 2024 (Healthcare Facilities Today). The structural vacancy was accelerated by e-commerce, amplified by COVID-era closures, and has been sustained by the ongoing consolidation of retail into fewer, higher-performing locations. Large-format retail — the former Sears, Kmart, Circuit City, Toys “R” Us, and Barnes & Noble spaces that anchor or once anchored shopping centers — is disproportionately represented in this vacancy because new retail tenants rarely want 40,000–80,000 square feet of single-floor space.
Healthcare, by contrast, often does. A regional health system developing an ambulatory care campus, a multi-specialty outpatient building, or a freestanding emergency room needs exactly the kind of large-format, single-story, high-visibility, accessible space that big-box retail provides. The match is not coincidental.
Kaiser Permanente converted a 33,300-square-foot former Circuit City electronics store in Portland into a LEED Gold-certified medical office building. The completed facility includes 41 exam rooms, 2 treatment rooms, 1 injection room, 31 offices, X-ray, 2 ultrasound rooms, a blood draw laboratory, and a pharmacy (RCLCO Real Estate Consulting case study).
The Circuit City shell provided the key advantages of a retail conversion: a large, column-free floor plate with 32-foot bay spacing, high floor-to-floor clearances, an existing loading dock (repurposed for medical supply delivery), a surface parking field meeting patient volume requirements, and a commercially visible location accessible by patients who were already familiar with the site.
The engineering challenges included a complete HVAC replacement — the retail system was not capable of meeting ASHRAE 170 ventilation requirements — new plumbing rough-ins for hand-washing sinks in each exam room, upgraded electrical to hospital-grade throughout clinical areas, and a new emergency generator for the essential electrical system.
Saratoga Hospital converted a former Sears department store in Wilton Mall into an outpatient care facility designed by SMRT Architects. The project used the large open floor plate to create what the design team described as “collaborative clinical hubs with clear views of every exam room” — a clinical operations model enabled by the absence of load-bearing interior walls that standard office construction imposes.
The Sears floor plate’s 20-foot floor-to-floor height — 5 to 6 feet higher than a typical purpose-built medical office building — proved advantageous rather than problematic. The additional ceiling height allowed dense mechanical, electrical, and plumbing routing above the clinical ceiling plane without the compromises that tight plenum spaces impose on healthcare MEP design.
SMRT added clerestory-style high windows to bring daylight into the deep floor plate — a standard adaptive reuse intervention for large-format retail, which typically has minimal window area relative to floor plate size.
A Medical University of South Carolina outpatient conversion of a former department store, documented by Healthcare Design Magazine, illustrates how structural bay dimensions map to healthcare space planning. The former retail building’s 32 by 32 foot structural bays — the standard bay size for mid-century department store construction — are described by Aaron Jeffers, a principal at McMillan Pazdan Smith Architecture, as “ideal for conversion into large procedure and operating rooms.”
That observation turns one of big-box retail’s apparent liabilities — a structural grid too large for standard office subdivisions — into a healthcare asset. A 32 by 32 foot bay can accommodate an imaging room, an endoscopy suite, a procedure room, or a clinical hub that would require structural demolition and rebuilding in a purpose-built medical office building at standard 20 by 30 foot bay spacing.
BayCare Health System in the Tampa Bay area represents perhaps the most aggressive current example of healthcare systems systematically acquiring and converting retail real estate. In 2024 and early 2025, BayCare acquired and began converting a 32,000-square-foot Barnes & Noble bookstore in Carrollwood into a primary care, urgent care, and imaging facility; a 15,000-square-foot Barnes & Noble in St. Petersburg into a freestanding emergency room estimated at $30 million in development cost; and a former CVS drugstore into a separate freestanding emergency room (Substack/Jason Miller, Repurposed and Redeveloped Commercial Real Estate, 2025).
BayCare’s stated rationale — maximizing accessible patient touchpoints in commercially visible, easily accessible locations — illustrates why the health system is investing in existing retail real estate rather than waiting for purpose-built construction to deliver. The locations are already where patients are.
Inova Health System’s $2 billion redevelopment of the former Landmark Mall in Alexandria into a hospital campus represents the largest-scale retail-to-healthcare conversion documented in current commercial real estate literature (Matthews CRE). The project transforms a failed enclosed mall into a fully operational medical campus — an example of the scale at which retail-to-healthcare conversion can operate when the supply of available space and the health system’s capital capacity align.
The conversion of a former Toys “R” Us store into a 47,000-square-foot pediatric facility by Lancaster Pediatric Center demonstrates the format across patient populations — not just adult ambulatory care (Matthews CRE). The project repurposed a commercially accessible, high-visibility retail site for a specialty pediatric practice that needed both clinical space and patient-friendly location.
Converting retail space to healthcare use is not a cosmetic renovation. Every major building system needs to be evaluated, and most need to be substantially upgraded or replaced. The following engineering challenges appear consistently across documented retail-to-medical conversion projects.
Retail HVAC systems are designed for comfort cooling of large, open spaces with high occupancy variability. They cannot meet ASHRAE/ASHE Standard 170 requirements for healthcare ventilation — minimum air changes per hour by room type, specific outside-air percentages, pressure relationships between spaces, all-exhaust airflow for isolation rooms, and filtration requirements for clinical areas.
A retail conversion to medical office requires designing and installing a new healthcare-compliant HVAC system. This is typically the largest single cost driver in the conversion, and it cannot be phased or deferred — a clinic that doesn’t meet ASHRAE 170 ventilation requirements will not pass its state inspection.
Aaron Jeffers of McMillan Pazdan Smith noted in Healthcare Design Magazine that the high floor-to-floor heights in older retail buildings — 18–22 feet is common — actually benefit MEP installation by providing plenum space for the dense mechanical routing that healthcare ventilation requires. Standard office buildings built at 12–14 feet floor-to-floor create genuine engineering constraints for healthcare MEP that big-box retail buildings avoid.
Commercial retail buildings have minimal plumbing — restrooms and a service sink, sized for retail occupancy. Medical office requires hand-washing sinks in every exam room, eyewash stations in labs, medical gas rough-ins where applicable, and greatly expanded restroom fixture counts for patient populations that include people with mobility limitations.
Adding plumbing to an existing retail building typically requires trenching the concrete slab to install new waste and supply lines. Whether slab trenching is feasible depends on the slab’s design, depth, and the presence of post-tensioning or structural conduit embedded in the slab. If trenching is not feasible, the alternative is above-slab plumbing — which increases ceiling height requirements and creates coordination conflicts with mechanical systems.
This is one of the first technical evaluations in a retail-to-medical conversion feasibility study, and it can significantly affect the project budget.
Retail electrical systems are designed for lighting, HVAC, and point-of-sale equipment. Medical office requires hospital-grade duplex receptacles (NEMA 5-20R) throughout clinical areas, an emergency generator compliant with NFPA 99 for the essential electrical system, automatic transfer switch capability, and in some procedure rooms, isolated power systems with line isolation monitors.
Depending on the existing building’s electrical service capacity, the conversion may also require a larger utility service entrance — a utility coordination process that can add 3–6 months to the project schedule if planned late.
Commercial retail buildings are often constructed to code-minimum energy standards — minimum roof insulation, minimal wall insulation, and single-pane or double-pane storefront glazing at the entry. Healthcare facility energy codes, which reference ASHRAE 90.1 and increasingly more demanding state energy codes, require higher thermal performance than minimum retail construction typically provides.
Roof insulation upgrades — which may be addressed at roof replacement if the conversion coincides with end-of-roof-life — and wall insulation improvements are common scope items in retail-to-medical conversions, particularly in older big-box buildings where the envelope was built to 1970s or 1980s energy standards.
Retail loading docks — the one element of a big-box building that healthcare systems actually need and that new medical office construction often doesn’t have — should be preserved wherever possible. Medical facility supply chains involve frequent deliveries of pharmaceutical supplies, medical equipment, and sterile disposable products. A loading dock that allows delivery vehicles to back up to a controlled receiving area separates clinical supply from patient arrival in a way that a standard office building’s parking lot cannot.
Aaron Jeffers of McMillan Pazdan Smith specifically identifies loading dock retention as “a major cost saver” in retail-to-medical conversions — the alternative is constructing a dedicated service entrance and receiving area from scratch.
Big-box retail buildings typically have window area only at the primary storefront — the rest of the building is opaque, which was appropriate for a retail environment where merchandise display, not daylight, was the design priority. A healthcare facility in the same shell requires daylight in clinical and waiting areas — for patient experience, staff wellbeing, and increasingly for LEED credit compliance.
Adding windows to existing masonry or metal panel walls requires structural assessment and potentially structural reinforcement at new openings. Clerestory windows in the upper wall or roof monitors — skylights with vertical glazing above the roof plane — are common solutions that bring daylight into deep floor plates without adding windows at ground level where privacy and security may be concerns.
Asheville and the surrounding WNC region have not yet seen the scale of retail-to-medical conversion that larger markets like Tampa, Portland, and Northern Virginia have experienced. But the conditions that are driving those conversions nationally are present in WNC.
The WNC retail market has vacancy. The I-26 and US-70 corridors have aging strip centers and a handful of larger-format vacancies that have been slow to fill with traditional retail tenants. Mission Health’s expansion of ambulatory and urgent care across Buncombe, Henderson, Madison, and Haywood counties under HCA Healthcare’s ownership creates institutional demand for accessible outpatient locations that don’t require the 24–36 month timeline of ground-up construction.
Asheville’s 2025 UDO amendments made by-right conversion of non-conforming commercial structures available without a variance in many situations — directly addressing one of the regulatory friction points that makes retail-to-medical conversion more difficult in markets with strict adaptive reuse review processes. For a health system or ambulatory care developer evaluating WNC sites, the permitting path for a retail conversion is now more predictable than it has been.
A commercial architect in Asheville with experience in both healthcare facility design and commercial adaptive reuse is the right starting point for evaluating whether a specific WNC retail site is feasible for medical conversion. The feasibility questions — slab trenching viability, electrical service capacity, structural bay dimensions, HVAC replacement cost, envelope performance — are answerable in a pre-design assessment before a purchase contract is signed. Getting those answers is the most valuable thing an architect does on a retail-to-medical conversion project before any design work begins.
Three reasons: cost, timeline, and location. Adaptive retail-to-medical conversion typically costs $200–$350 per square foot, compared to $400–$650 per square foot for ground-up medical office construction. Timelines are typically 12–18 months versus 24–36 months for new construction. And commercially visible retail locations with large surface parking are often better located for patient access than purpose-built medical office parks built on lower-cost land away from patient populations.
HVAC replacement is typically the largest single cost and the most technically demanding challenge. Retail HVAC systems cannot meet ASHRAE 170 healthcare ventilation requirements — the air changes per hour, outside-air percentages, pressure relationships, and filtration levels required for clinical spaces. A complete mechanical system replacement is required on every retail-to-medical conversion, and it cannot be phased. Slab trenching for new plumbing is the second-largest variable; if the existing slab doesn’t support trenching, above-slab plumbing solutions add cost and ceiling height requirements.
Healthcare Design Magazine and industry case studies suggest 20,000–80,000 square feet as the practical range for ambulatory care conversions. Below 20,000 square feet, the MEP replacement cost as a percentage of total construction approaches ground-up construction cost, reducing the economic advantage. Above 80,000 square feet, the clinical program needed to fill the space — multiple service lines, specialty mix, imaging capacity — requires the kind of institutional investment that health systems typically make in purpose-built campuses rather than conversions. The 25,000–50,000 square foot range captures most urgent care, primary care, specialty care, and imaging center programs that drive demand for ambulatory space in WNC.
The standard 32 by 32 foot structural bay in mid-century and later big-box retail buildings is actually advantageous for healthcare conversion. This bay dimension accommodates large clinical spaces — imaging rooms, procedure rooms, endoscopy suites, clinical hubs — that standard office construction at 20 by 30 foot bays would require structural demolition and rebuilding to create. Older retail buildings with smaller bay sizes (24 by 24 or smaller) are less advantageous because the structural grid constrains clinical space planning more aggressively.
For properties in Local Historic Districts — Downtown, Montford, Biltmore Village — exterior changes to a retail building being converted to medical use require a Certificate of Appropriateness from the Historic Resources Commission. Interior work does not require HRC review. Most retail-to-medical conversion opportunities in WNC involve strip center and big-box properties outside designated historic districts, where standard permitting applies. For properties in the CBD/DDR overlay, the Downtown Design Review Committee may be involved for exterior modifications.
Documented national case studies suggest 12–18 months for retail-to-medical conversion versus 24–36 months for ground-up medical office construction. In Asheville, the specific timeline depends on whether the project requires historic district review, the complexity of the HVAC replacement and plumbing upgrades, and the building permit review timeline through Asheville’s Technical Review Committee. The 2025 UDO amendments’ by-right conversion provision, where applicable, removes the Board of Adjustment variance timeline from the process — which can reduce pre-construction administrative time by 3–6 months compared to projects that previously required a variance.
Form & Function Architecture has designed healthcare facilities and commercial adaptive reuse projects across Asheville and Western North Carolina. The studio’s combined experience in ASHRAE 170-compliant healthcare design and commercial adaptive reuse makes the studio a natural fit for the pre-design feasibility work that determines whether a specific retail site is a viable candidate for medical conversion.
If you’re evaluating a WNC retail property for healthcare use — as a health system, a developer, or an independent practice group — contact Form & Function at 828.575.2423 or info@ffarchitecture.com to schedule a site assessment.
