When the backers of Cleveland’s medical mart finally announce the project’s first planned tenants Friday at a ceremonial groundbreaking, savvy observers will scan the list for the identities of big-name “anchor tenants.”
The reason is simple: Those anchor tenants will be crucial to the success of the $465-million project by luring buyers who’ll also visit the project’s smaller, lesser-known tenants.
Without the big names (or at least a couple), buyers may be less willing to make the trek to Northeast Ohio in search of the medical products — devices, information technology, furnishings and other equipment — that will be on display in the mart. Think of the anchors as the big department stores like Macy’s or Nordstrom at the ends of a mall that help deliver shoppers to the mall’s numerous smaller vendors that lie in between.
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Aside from drawing in buyers, it stands to reason that one or two big-name anchor tenants will also make it easier for the medical mart’s developer to sign smaller tenants, which will be more confident in the project’s long-term prospects if the big guys are already buying into the concept.
“Who is going to be the anchor tenants will be an interesting litmus test,” said J.B. Silvers, a professor of healthcare finance with Case Western Reserve University. “Those anchors draw people in.”
Unfortunately, the medical mart’s Chicago-based developer, MMPI, won’t make it easy to pick out any anchor tenants from the larger list. Unlike the competing Nashville project, Cleveland won’t specifically identify any tenants as being “anchors,” said Dave Johnson, a spokesman for MMPI. (Nashville has thus far labeled one of its three announced tenants as an “anchor.”)
So what’s a medical mart handicapper to do in the absence of the “anchor” label? Simply start with a list of the world’s biggest medical device companies. Here are a few: Medtronic, St. Jude Medical, Boston Scientific, Johnson & Johnson, Philips Medical Systems, Siemens Medical Solutions and Stryker.
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If none of those companies — or at least comparable companies — appear on the tenants list, it could spell trouble for MMPI in terms of its ability to sell the medical mart in the future.
Of course, the absence of big names certainly doesn’t sound the death knell for the project. We’re only in the beginning chapters of a long book, and MMPI has plenty of time to continue signing tenants before the mart’s planned 2013 opening.
But a few big-name anchor tenants will go a long way in silencing critics who’ve doubted the viability of the project all along, so it’ll be hard to view a lack of those names as anything but a letdown.
