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.”

According to the report, higher-quality medical-office space is becoming increasingly hard to find. Over the past six years, class-A medical-office vacancy has dropped a whopping 81.7%. While overall rental rates for medical-office were flat on a year-over-year basis, class-A and -B rates recorded minor increases of 1.5% and 0.7%, respectively.

Medical-office users are eschewing lower-quality space in favor of high-quality space, the report shows. While overall direct vacancy increased slightly from 7.8% in Q4 2015 to 8% in Q1, vacancy in class-A medical-office space continued its downward trend as stated above.

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.”

According to the report, higher-quality medical-office space is becoming increasingly hard to find. Over the past six years, class-A medical-office vacancy has dropped a whopping 81.7%. While overall rental rates for medical-office were flat on a year-over-year basis, class-A and -B rates recorded minor increases of 1.5% and 0.7%, respectively.

Medical-office users are eschewing lower-quality space in favor of high-quality space, the report shows. While overall direct vacancy increased slightly from 7.8% in Q4 2015 to 8% in Q1, vacancy in class-A medical-office space continued its downward trend as stated above.