Why Healthcare Is Seemingly the Iron-Clad Sector

Ross: “With San Diego’s population continuing to age, the demand will always be there, and new construction will not be able to keep up. This will limit our county’s medical-office vacancy and over time keep upward pressure on rents.”

SAN DIEGO—People will always need healing, and very few healthcare specialties and services are dependent on a strong economy or other factors that affect most other industries and the real estate in which they are housed, making healthcare real estate seemingly iron-clad, JLL’s VP Chris Ross tells GlobeSt.com. The firm recently released a report stating that class-A medical-office vacancy in San Diego decreased by 50 basis points in Q1 from the previous quarter to 6.1% and that class-A medical office rents are now just 3 cents off the previous high-water mark of $3.45 per square foot in 2007. Development is occurring, with 206,680 square feet of medical-office construction in three properties taking place here.

“Aside from various legislative changes, which are constantly on the horizon and which will always have at least some impact on physicians’ and hospitals’ business models, the healthcare industry is stable and will remain so for the foreseeable future,” Ross tells us exclusively. “With San Diego’s population continuing to age, the demand will always be there, and new construction will not be able to keep up. This will limit our county’s medical-office vacancy and over time keep upward pressure on rents.”