Developers are building medical offices like Downtown West Medical Offices without any tenants reserving the building. Downtown West will be a 60,000 sq/ft contemporary medical office complex located in the heart of Los Angeles, and currently has no tenants reserved. Peter Becronis, owner of developer Wembley Realty Advisors and one of the partners in the Downtown West project says that he is not worried about not having tenants lined up because there is such a high demand for primary medical care in downtown Los Angeles. However, Becronis and his partners are not running off of blind hope.
Making educated decisions based off of key demographic trends and location are the most important prerequisites to starting a massive project like Downtown West. Another huge factor is the Affordable Care Act, which has led many medical providers to specialize their services and the care they provide and therefore has increased the demand for specialized facilities. There is a shortage of these such facilities and this is what Becronis and his partners are counting on.
The market is prime for these sort of speculative projects. Nationally, development is on the rise while vacancy rates are declining. And yet there are very few speculative projects currently planned. This is a window of opportunity that, for now, seems wide open.