What does Ozempic Have to do With the Real Estate Market?
Mon Oct 23, 2023 on News
Weight loss drugs, such as Ozempic, are potential disrupters to not only business in general but also the real estate market. Why? With the popularity of such weight loss drugs, people’s overall behaviors have influenced the food industry. Walmart reported that customers taking Ozempic buy less food and which in turn, has an effect on retail space. Retail food stores and food space may decrease in size while other departments expanded if less people are consuming certain foods. The overall food ecosystem, therefore, may change.
Effects on Real Estate
As more food stores potentially change, commercial real estate in general will evolve. Unless the food stores are decreasing sugary, fast-food items to more healthy offerings, many food stores will become smaller. The impact of weight loss drugs could result in an increase in foot traffic at malls, as more people shop for smaller sizes and active wear. This would benefit mall operators as more stores that cater to one’s well-being and fitness and yet may also challenge restaurants to provide more healthy, less caloric offerings. Thus, the type of stores found in commercial spaces as well as their offerings will evolve.
The face of residential real estate will change as well. Some speculate that a population more attuned to weight loss due to weight loss drugs such as Ozempic may seek apartment buildings or residential homes that have more shared spaces and amenities such as pools as more and more people become active. This will mean people will prefer to live near parks, oceans, rivers, and mountains where they have easier access to the outdoor activities.
The effect of weight loss may also result in one’s overall healthier well-being with potentially less people having to see doctors and live longer lives. With such a scenario residential senior housing may become even more popular, while medical complexes may need to find other uses.
Basketball court at Al E. Polin Park in Indianapolis, which received funding from the Lilly Endowment. AJ MAST FOR THE WALL STREET JOURNAL
In addition to consumer behavior effecting real estate due to the weight loss drugs, nonprofit foundations that are the large shareholders of Eli Lilly and Novo Nordisk, the companies selling Ozempic and other popular weight loss drugs, have expanded their donations by hundreds of millions of dollars. Some projects built from these donations include new pickleball courts, replacement of playground equipment, and capital budgets for parks. The ability of these nonprofits to donate space for outdoor recreation, encouraging more physical activity, further affects real estate as the underlying land may have been used for other purposes while at the same time making nearby residential properties more valuable.
What does this all mean?
Consumer behaviors, whether the result of weight loss drugs, typically influence the real estate market (and overall economy in general). The overall health of our population has an effect on what we do and how we plan – which in turn affects real estate. For example, if life expectancy increases, we will need even more housing for the growing older population. From switching from certain foods to healthy alternatives, restaurants need to evolve. From wanting more active lifestyles and not requiring as many doctor visits, our residential choices will evolve quickly. Real estate is intertwined with what affects us and how we choose to live.
From the trenches,
Posted first at: Oppenheim Law