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Scoop: Silverstein Properties backs in-house clinic

Erin Brodwin
Mar 23, 2022
Illustration of elevator buttons, one of them with a lit up red cross instead of a number.

Illustration: Gabriella Turrisi/Axios

Hybrid primary care provider Reside Health is partnering with real estate and investment company Silverstein Properties to open its largest clinic in Lower Manhattan, Reside CEO Komal Kothari tells Erin exclusively.

Why it matters: Onsite employee-facing hybrid wellness centers were trending long before COVID hit, and Reside Health is just the latest example — with a twist.

  • Similar to rivals Crossover Health and Marathon Health, Reside combines brick-and-mortar assets with a digital health platform to offer a mix of primary care and wellness services.
  • But rather than contracting with companies to offer its services to employees as Crossover and Marathon do, Reside contracts with building developers to offer its services to enterprise tenants.

Driving the news: As offices and other businesses begin to reopen their doors amid a temporary lull in COVID cases, the availability of near- and onsite medical clinics could prove a helpful selling point.

  • "Employees now see health care as one of the most, if not the most important benefit their companies offer," Kothari tells Erin.

How it works: In partnership with Silverstein, Reside is opening the latest location inside the Inspire Workspace at 4 World Trade Center.

  • While Silverstein pays for the buildout, Reside offers tenants subscription-based primary care and wellness services including mental health support, acupuncture, massage and physical therapy.
  • For individuals whose employer doesn't foot the bill for Reside, a one-year subscription is $150.

Yes, but: Fairly new to the market, Reside could face several obstacles in its quest to achieve its stated goals of "whole building, whole person health," according to industry observers, including ...

  • Privacy concerns: Some employees may avoid visiting onsite clinics out of a desire to keep their health and work lives separate.
  • Potential problems turning a profit as a subscription-based business: Despite notable public exits and rising popularity among subscription-based health care offerings, a recent PitchBook report found that few have managed to make money.
  • Issues differentiating themselves from larger and better-funded incumbents.

Context: So far, New York-based Reside has opened three offices alongside some of the city's biggest landlords.

  • The company has raised $8.5 million in a seed round from BBG Ventures, 8VC, Bling Capital and AlleyCorp.
    • For comparison, Crossover has raised a total of $281.5 million, while Marathon has collected $25 million, according to PitchBook.
  • Reside was co-founded by Kothari, an assistant professor of medicine at NYU Langone Health, and Kevin Ryan, the founder and CEO of AlleyCorp.
    • Ryan has also founded — and currently leads — a handful of other retail and health care startups including Capable Health, Nomad Health, Pearl Health, Affect Therapeutics and Humming Homes, to name a few.

What they're saying: Medical clinics located close to where people live and work make logical sense, but it's too early to assess whether there's any advantage in offering them to enterprise tenants rather than employees.

  • "People certainly value a convenient provider who's easy to choose and in their building," says Steven Wardell, a health care consultant and author, "but I don’t see any special benefit in tying onto real estate rather than an employer."

Erin Brodwin co-authors the Axios Pro Health Tech deals newsletter. Start your free trial at AxiosPro.com.

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