Beverly Hills Has Healthy Medical Office Market : Specialist Says City’s Golden Triangle Has Vacancy Rate of Only 2%; Rents Run to More than $36 a Square Foot

Healthy is the word to describe the Beverly Hills medical office market.

This is the diagnosis of Todd Katz, a medical office specialist in the Beverly Hills/Century City office of Coldwell Banker.

Katz says the Beverly Hills Golden Triangle--bounded by Wilshire and Santa Monica boulevards and Crescent Drive --has a vacancy rate of just 2%. The triangle contains about 485,000 square feet of medical office space.

Rents, he says, run to more than $36 a square foot a year, with few landlord concessions. Rents in east Beverly Hills are about $24 a square foot.

According to developer Harold Held, a partner in Held Properties of Los Angeles, rents in Los Angeles range from $18 to $27 a square foot, with a vacancy rate between 8% and 10%.

Rents in Los Angeles medical buildings adjacent to hospitals are about 10% higher because of location and they are usually new buildings, Held says. Vacancy rates in these buildings average 4% to 5%.

How did Beverly Hills become the medical Mecca?

Held says it was largely the work of pioneer developer George A. Cordingly Sr., who came to Beverly Hills in 1923 from Denver.

Cordingly built his first medical building in Beverly Hills when the city had only six doctors. When he died in 1962, a Los Angeles Times obituary said he probably was landlord to more doctors than anyone else in the world, an estimated 1,000, although not all practiced in Beverly Hills.

Today, there are more than 800 doctors in Beverly Hills, the largest specialty being internal medicine, with about 200 practitioners. There are about 60 psychiatrists in the city. Held says that while medical office rents are higher than regular office rents, it costs about 15% more to build and about 8% to 10% more to operate a medical building.