SAN RAMON, Calif. – RealEstateRama – Meridian, a full-service real estate developer and owner of medical real estate, is pleased to announce that the company has closed escrow on the sale of its new-construction, 11,250-square-foot outpatient dialysis clinic in Modesto, California. The purchase price was $6.1 million, representing a cap rate of 5.1%.
The outpatient clinic is located at 1328 Coffee Road and is positioned just down the street from Sutter’s Memorial Medical Center and less than a block away from a variety of neighborhood amenities.
In April 2018, Meridian acquired an infill 39,204-square-foot vacant parcel to build the Modesto dialysis clinic and completed the development in May 2019. “Modesto is seeing heightened demand for medical facilities due to rapid growth in the area. We are very pleased that our client finds value in our ability to unlock difficult off-market sites or assemblages for new development in our very land-constrained market,” said Mike Conn, Meridian Executive Vice President.
“This particular site is much tighter and narrower than most developments we’ve done for a building of this size,” Conn continued. “We had to structure a deal with the neighbor for a shared driveway to functionally layout the building and site. Our ability to think outside the box and get creative with design ultimately led to the success of this building.”
Meridian’s project architect was Harriman Kinyon Architects of Walnut Creek, California. Kier and Wright of Livermore, California was the civil engineer and the general contractor was H2 Builders of Napa, California.
According to Conn, “Kidney failure, also known as end-stage renal disease (ESRD), is a fatal condition unless the patient undergoes dialysis, in which a machine filters toxins and fluids from the blood outside the body, or unless they receive a kidney transplant. In-center hemodialysis patients are treated approximately four hours a day, three times a week, for the remainder of their lives. There is a tremendous need to bring these types of services into the communities where patients live, and we are thrilled that we were able to deliver this new, leading-edge facility to the Modesto community.”
The buyer was in a 1031 exchange and was looking to diversify their portfolio into healthcare with a single-tenant leased investment. Meridian was represented by Chris Sheldon of Cushman & Wakefield of San Francisco in the sale.
Founded in 1999, 2019 marks Meridian’s 20th anniversary. Meridian’s history has been built on the delivery of successful healthcare and office projects, including more than 15 campuses and hundreds of buildings. Some of its highlighted transactions in 2019 include the purchase of a 53,500-square-foot culinary and arts school building in Santa Ana, California for a medical office conversion and the purchase of a six-story, 100,000-square-foot office building in San Mateo, California.
Meridian also sold several of its newly constructed dialysis clinics including one in Castro Valley, Stockton and the other in Downtown Long Beach, California. In October, Meridian sold Cotton Medical Center in Pasadena, California, a multi-tenant, multi-specialty medical office complex totaling 115,000 square feet adjacent to a major hospital campus. The buyer was Healthcare Realty Trust (NYSE: HR).
Earlier in the year, Meridian completed the renovation of a formerly vacant 26,000-square-foot multi-tenant radiology/oncology medical office building located in Torrance, California. Meridian secured a lease with a prominent outpatient imaging tenant for over half of the building before closing escrow. In Phoenix, Arizona, Meridian completed the renovation of Grunow Memorial Medical Center, a landmark 53,000-square-foot, two-story, medical office building that was largely vacant at acquisition. Once the repositioning was completed, Meridian formed a joint venture with Harrison Street, a Chicago-based investment management firm, for the recapitalization of Grunow Memorial Medical Center. Meridian also just broke ground on a 25,000-square-foot imaging and infusion clinic for a major provider and has several other ground-up opportunities in the pipeline for 2020.
Conn adds that Meridian is continuing to aggressively pursue acquisitions and developments throughout California, the Southwest and the Pacific Northwest.
Founded in 1999, San Ramon, California-based Meridian is a full-service real estate developer and investor specializing in high-quality, brand-enhancing developments with distinctive expertise in healthcare real estate. Meridian’s services are broad in scope, but meticulous in detail — from site evaluation and land acquisition to entitlement and planning to construction and management. Meridian has offices in Phoenix, Northern California, Southern California and Seattle. For more information, see www.mpcca.com.
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MONAGHAN COMMUNICATIONS, INC.