HOUSTON-The medical office sector here saw another quarter of growth in Q2, posting nearly 150,000 square feet of positive net absorption. Total positive absorption for the year is now almost 300,000 square feet, and almost one million square feet in the past 18 months, according to a second quarter report released recently by Grubb & Ellis.

Vacancy also fell during the quarter by 30 basis points to 11.5%. Henry Hagendorf, VP with the company’s Healthcare Practice Group, tells GlobeSt.com that the success of the sector can be attributed to the massive residential growth in the suburbs. “The city has been growing in several directions, with hospital systems that have built in the past two years along major freeways. There’s also been a trend for a number of years toward new standalone buildings such as surgical centers, taking services out of the hospitals,” he says.

Though there were new developments that came online by early 2010, most of the space is already filled, Hagendorf says. The properties include 1140A Cypress Station, Kingwood Professional Plaza and 1400 Creekway, for a total of 70,000 square feet.

For the rest of the year, Hagendorf expects the vacancy-drop trend, and even new development, to continue. He says Houston leads the nation in uninsured people, and the new health care reform bill should provide insurance to four million to five million people in Texas. “The more people to be insured, the more demand for additional office space,” he says.

Transactions will also continue, according to the report. In the second quarter, one of the most important medical office transactions was Healthcare Trust of America Inc. purchasing a 176,000-square-foot medical facility at 7900 Fannin St. from Plan B MOB LP for $38.1 million. The report predicts that REITs will continue to plan a huge role on the investment side as many are now flush with cash and are scouring the Houston market for opportunities.