Voit Real Estate Services has recently expanded its services to include a healthcare advisory practice, Health+ Real Estate Advisors, led by Vice President Tim Cajka. Cajka combines his real estate brokerage experience with leadership positions held at Quest Diagnostics, DaVita, and GE Capital, where he utilized his background in commercial real estate to contribute to organizational growth strategies. Since joining Voit’s San Diego office, Cajka has focused on leasing and investment sales of medical office buildings (MOBs), with plans to expand the team’s capabilities in specialty areas, including Life Sciences.
Why MOB?
The MOB market in Southern California (Greater Los Angeles and San Diego) has historically been a stable one for investors. This stability is driven by consistent demand for healthcare services, an aging population, and a shift towards outpatient care. The asset class is also known for long lease terms and low tenant relocation rates.
“No property type is ‘recession proof,’ but MOB is market resilient,” explains Cajka. “Healthcare needs often take priority in spending, providing a level of resiliency for tenants occupying MOBs over time.”
Economic uncertainty may be mitigated by proactive planning from some providers. A report by Kaufman Hall indicates hospital operating margins increased by 3% in April as some nonprofit hospital systems made adjustments in anticipation of financial pressures.
Development Conversion Trends: Underperforming Assets into MOB
While office vacancy rates were approximately 15% in Los Angeles and Orange County, and slightly lower in San Diego, according to Voit market reports, the MOB vacancy rate was 7.1% in San Diego and just under 10% further north.
Low vacancy rates for quality assets have led some developers to consider converting underperforming assets into medical office space. However, this process can be complex and costly. The cost to build out medical office space in Southern California ranges from $200 to $300 per square foot, compared to $60 to $150 per square foot for traditional office buildings. Medical office buildings often require specialized plumbing, electrical, and HVAC systems, along with stricter regulations and specific layouts for medical use.
Legacy Retail Properties attracting Medical Office and Healthcare Services
Cajka notes that retail-to-medical conversions may make sense in San Diego due to consumer preferences for convenient, accessible care near shopping, residential, or commuting areas. The American Hospital Association’s 2025 Environmental Scan supports this, noting a preference for more accessible and less costly care settings outside hospitals.
High Vacancy in Legacy Retail
Underperforming or vacant retail centers in San Diego are potential candidates for healthcare conversion. These assets typically offer ample parking, visibility, signage, and ground-floor access. Additionally, many San Diego submarkets have updated zoning ordinances since 2021–2023 to facilitate medical uses in retail zones. Sites with existing conditional use permits for drive-thrus or financial services can be suitable for outpatient and specialty clinics.
Strong Demand for Retail Locations
National and regional healthcare brands are increasingly choosing retail locations for expansion, a trend referred to as “medtail.” This model prioritizes convenience, accessibility, and affordability. Brands such as Carbon Health, One Medical, Sanitas, and Modern Animal prefer retail sites for their ease of patient access and visibility. Physician-owned practices are also seeking retail-like locations over traditional office spaces.
Cajka cites Clairemont, Chula Vista, Oceanside, East County, El Cajon, Mission Valley, and Kearny Mesa as promising locations, with former pharmacies, or now-vacant standalone bank branches, being prime candidates for conversion.
The Voit Long-Term Strategy
As the Health+ Real Estate Advisors group expands, Cajka has developed a strategy to help owners of underperforming assets consider converting to MOB. These efforts include:
• Identifying aging or underutilized retail centers in dense trade areas or near hospitals, especially those with existing medical uses or vacancies.
• Targeting former banks, urgent care facilities, and fast-food locations, particularly freestanding buildings with drive-thrus or second-generation plumbing.
• Building relationships with retail landlords, REITs, and family offices who may be open to repositioning assets.
• Offering medical-specific space planning guidance and helping landlords understand build-out costs, TI structures, and licensing considerations.
• Staying current on local zoning and ADA compliance issues that affect healthcare uses in retail zones.
“At Voit, we aim to assist owners and healthcare providers in capitalizing on these trends,” says Cajka. “Whether it’s an investment sale, a lease, or a retail conversion, our goal is to deliver comprehensive service in every transaction.”