Class-B Medical Office Rents Hit All-Time Highs in San Diego

Strong medical office demand is outpacing new construction in San Diego—creating a tight supply and fueling leasing activity for class-B product. As a result, class-B medical office spaces are getting leased at record rents while vacancy is decreasing. According to research from JLL, class-B asking rents are up 6.4% to $3.60 per square foot. Class-A rents, by comparison, are at $4.29, with new product being absorbed quickly.

“Class-A space is incredibly tight right now, so class B medical office buildings are reaping the benefits, filling vacancy at all-time-high rents,” Chris Ross, EVP at JLL, tells GlobeSt.com. “Conveniently located buildings continue to attract the most activity across all classes, and fully improved space is usually the first to go.”

The growth and expansion of the medical office sector in San Diego isn’t all that surprising. Ross says the market is a hotspot for quality healthcare and San Diego residents place a high value on a healthy lifestyle. “We have excellent healthcare in San Diego, with top-rated hospitals and health systems, world-class clinical and pharmaceutical research, progressive development and implementation of healthcare technology, and highly skilled physicians,” he says. “We have a dynamic population that generally values its health, more so than the average community, and much of our population has good insurance that allows our healthcare providers to succeed and grow.”