September 6, 2017
The aging U.S. population, pressure for healthcare providers to cut costs and new technologies have boosted demand for medical office properties in recent years, according to a report from CBRE. In SoCal, this increasing demand and single-digit vacancy rates, coupled with low levels of new supply in recent years, have fueled record rent growth.
Medical providers pay the most for office space in Los Angeles, Orange County and San Diego, each recording increases of 9% or more since 2010. Los Angeles is the fourth most expensive U.S. medical office markets after New York, San Diego and the San Francisco/Bay Area.
CBRE’s Bryan Lewitt says, “Southern California is a very expensive market for healthcare providers regarding their real estate occupancy costs. This region is extremely under-built when it comes to healthcare real estate. During this last economic recovery, half of the potential healthcare properties were converted to non-healthcare uses.”
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