The demand for medical office space is certain to rise in Orange County, as the ranks of insured grows under Obamacare. But the supply of MOB might not keep up.

Newmark Grubb Knight Frank SVP Garth Hogan, who co-leadsthe companysglobal healthcare servicesgroup says Orange County isnt completely infilled, but we dont have a lot of land opportunities for new medical office properties. So why not conversions? Its difficult to overcome the hurdles of zoning, narrow building footprints, and a lack of necessary parking. Building footprint is critical as health systems are incentivized to create designs for increased efficiency and increase patient flow. That requires deep bay depths. (Plus physicals are awkward enough without doing them in somebody's old cubicle.)

Healthcare systems will also be on the hunt for new HQ space, Garth adds. Recently, MemorialCare Health System acquired the 180k SF 1588 South Coast Dr in Costa Mesa, where it will move its HQ.The move coincides with MemorialCare's recent addition of hospitals, physician groups, outpatient and ambulatory facilities, and retail health centers. According to Newmark Grubb Knight Franks Tim Helgeson, an advisor on the transaction, MemorialCare was able to get the property--which is highly visible along the 405--at below replacement cost.