SAN DIEGO—More physicians are acquiring medical-office buildings in San Diego, which is in keeping with the area's entrepreneurial spirit, Chris Ross, VP of JLL's healthcare practice group, tells GlobeSt.com. The firm recently released its San Diego medical-office report for Q2, which stated that investors remain bullish on nationwide medical-office buildings, with nearly 100% higher year-to-date sales volume. And while sales in San Diego were limited during the first half of 2015, three sales greater than $15 million have already transpired during the third quarter. In addition, San Diego MOB vacancy continues to decline and now sits at 8.7%, down from 10.3% a year ago. We spoke exclusively with Ross about what attracts investors to MOBs nationally and in this market.

GlobeSt.com: Why are investors so bullish on medical office buildings? 

Ross: Healthcare is possibly the most steadily growing and predictable sector of the economy. Medical-office property will continue to experience remarkably strong levels of interest from investors seeking low-risk and often high-upside assets with good cash flow. Obamacare, the dramatic growth of our elderly population and healthcare real estate's strong performance through the recent recession have led to a 91% increase in national spending in healthcare real estate over the past 12 months.

GlobeSt.com: What types of tenants are taking space in these buildings now and lowering the vacancy rate further? 

Ross: We are seeing activity from a variety of providers. Those that have been the most active in '14 and '15 are large primary-care and multi-specialty physician groups (often affiliated with a large health system), urgent-care centers, orthopedic and other specialty surgery groups, cardiologists, cancer-related providers, pain-management physicians, dermatologists, cosmetic surgeons and dentists. Many of these groups and sole practitioners are looking to expand or open satellite locations, and being among the top income earners in healthcare, they tend to favor class-A space. In many instances, they are either relocating to locations that are more accessible to their patients or taking the opportunity to enhance their image to help grow their practice.

GlobeSt.com: Are healthcare providers feeling confident enough to invest in MOBs themselves, or do you feel they will continue to remain tenants or as part of larger health systems? 

Ross: We are absolutely seeing more physicians acquire medical office buildings in San Diego and throughout Southern California. Physicians seem to be more entrepreneurial today than they were just a few years ago when there was much more concern surrounding potential Medicare reimbursement cuts and the Affordable Care Act. With providers gaining a little more clarity about the future of this industry, they feel more comfortable investing in medical properties—whether for themselves or purely as an investment. Rising rents are also causing physicians and health systems to put some of that money back in their pocket through ownership, although it is not always easy to find opportunities to do so.

GlobeSt.com: Which types of specialty healthcare groups are growing in this market?

Ross: As far as traditional medicine goes, specific specialties tend to grow when there are changes in reimbursements or insurance coverage that favor their field. Right now a few of those include pain management, urgent care, behavioral health and community clinics. But because of the continued recovery in the economy, the specialties that have seen the most dramatic growth the past 24-plus months are the cash-based or self-pay providers such as fertility medicine, cosmetic surgery, cosmetic dermatology and LASIK. Fertility centers in particular seem to be in rapid expansion mode as research and technology improve, success rates continue to make strides and more and more families become comfortable with IVF procedures. As embryo freezing gains popularity and with more women having children at older ages, we expect this industry to continue down its path of growth.