The study points out that medical office buildings and otherhealthcare-related properties could continue to do well, despitethe recession, because "healthcare reform bodes well for thesector's future performance. The report contrasts the outlook forthe healthcare industry with that of other industries. Nonfarmemployment in Los Angeles is forecast to weaken further in 2009,but demand for medical office space "will get a boost from growthin the education and health services industry, where employers areexpected to add almost 10,000 positions by year end," according tothe report. The US as a whole is also projected to record growth ineducation and health services employment this year.

Medical office space in Los Angeles might also benefit more fromthe national healthcare reform efforts to broaden medical coverageand access. Los Angeles has one of the highest uninsured rates inthe nation, Marcus & Millichap points out, with more than 25%of the population lacking health coverage, compared to 16%nationally.

The study shows that, with 75% of the L.A. metro's populationcovered, there is approximately 4.2 square feet of medical officespace per insured individual. An increasein the insured rate toeven 90% of the population by 2013 would require roughly eightmillion square feet of additional medical office space, using thecurrent ratio.