Relief could be coming to Orange County’s tight medical office market.
Some 24 medical office projects are planned for development, or already are under construction in the county, according to John Wadsworth, vice president for the Irvine office of Colliers International.
The additions would be welcome news to a sector where vacancy rates run about 7.5% countywide, and are closer to 1% in key medical areas such as Newport Beach, said Wadsworth, who specializes in medical office and healthcare real estate.
The county currently has a total of about 190 medical office buildings for lease, totaling about 6.8 million square feet. While those buildings count an average age of almost 25 years, they’re still able to command hefty monthly rents,about $3.05 per square foot, well above the $2.74 per square foot average rate seen for general office buildings in the county.
“We haven’t had a lot of new buildings here recently,” Wadsworth said.
Between difficult zoning issues and finding spaces that can accommodate more parking than a typical office project, “a lot of developers don’t want to go through the hassle,” he said.
Doctors who’ve built up their practice in a specific neighborhood aren’t often keen on moving, either.
Among projects in the works:
n In Fullerton, developer Accretive Realty Advisors Inc. of Newport Beach is moving ahead with Providence Center, a mix of medical and retail space. The site, located west of St. Jude Medical Center, counts more than 100,000 square feet of space offered to doctors.
n In Tustin, Newport Avenue Medical Plaza, a 20,935-square-foot building on Newport Avenue, is set to open later this year. ACS Development Group of Irvine is developing and building the plaza.
n In Costa Mesa, Wadsworth is marketing Pacific Medical Plaza, a four-story, 76,500-square-foot medical office building near Hoag Memorial Hospital Presbyterian. Irvine-based Brown Associates is developing the $18 million project on the former site of two trailer parks.
The Pacific Medical project, set to open in December, is about 75% leased. Monthly lease rates run about $3.75, triple net, which corresponds to about $4.50 full service gross. The fact that the site is largely leased up shows the built-up demand for space in the area, Wadsworth said.
