SAN DIEGO—Building healthcare facilities away from acute-care centers eliminates the need for some rigorous and costly OSHPD requirements, making development more profitable, Lankford & Associates' president and CEO Robert Lankford tells GlobeSt.com. As we recently reported, the firm, along with HP Investors LLC, recently broke ground on a build-to-suit relocation project for health system Sharp Rees-Stealy in Rancho Bernardo that will include 100,000 square feet of medical-office space in a three-story building accompanied by an approximate 400-space multi-level parking structure and an additional 100 at-grade parking spaces. We spoke exclusively with Lankford about the demand for medical-office space in the San Diego market and what type of space these tenants are seeking.

GlobeSt.com: How is the demand for medical-office space in the San Diego market changing with shifts in the sector?

Lankford: We're noticing that more and more, the major health systems are going toward the non-intensive-care models that don't require the heavy earthquake protection and California OSHPD provisions. When you get into intensive care and major hospitals, they're expensive to build. Many services can be provided in other places closer to patients anyway, and the construction costs are lower. We are fortunate enough to have not only built and developed one of these non-intensive-care properties for Sharp several years ago, but we now have the opportunity to develop this one in Rancho Bernardo. It's a trend that's been growing in the healthcare industry.

GlobeSt.com: What types of medical tenants are now seeking space in the San Diego market, and what type of space are they seeking?

Lankford: We do a lot of office and some medical development. We're seeing that the majority of the requirements are coming from the major healthcare systems in San Diego County—Sharp is one of the larger ones. They're looking for facilities that are, in essence, urgent care, and in some cases ER, where patients see physicians directly ad there's no hospitalization at all. It's the clinic model, I call it. Generally, the location of that part of the healthcare practice doesn't have to be on the hospital campus, but the practices themselves are pretty much the same—it's just a different locale.

GlobeSt.com: What elements are included in state-of-the-art medical facilities being developed today?

Lankford: A lot of that comes from the healthcare tenants themselves. Many of the buildings we're developing are tailored to what it that particular hospital system wants and what floorplate sizes are necessary and desired. The size of the buildings is dictated by the tenant. There's also a significant amount of technology on the healthcare side, but on the development side, we're reacting to tenant requirements in terms of the buildings themselves. The tenants do a lot of the interior work themselves geared to the unique model that they're going to be using. It's entirely their design, and the decisions as to how it's laid out are theirs, whether we or another contractor does it. We're responsible for building the shell and core, parking, the exterior and the structural system, and they pretty much do all of the interior layout.