NEWPORT BEACH, Calif. – RealEstateRama – Meridian, a full-service real estate developer and owner of medical office real estate, announced that it has completed the sale of The Laguna, a 57,573-square-foot medical office building located at 24022 Calle de la Plata, on the Memorial Care Saddleback Medical Center campus in Laguna Hills, California. The buyer was a publicly traded Real Estate Investment Trust (REIT) that focuses on owning, managing, acquiring and developing outpatient medical facilities throughout the United States. The sale price was not disclosed.
Meridian acquired the medical office building in October 2017. During its ownership, Meridian invested over $2 million into the property, fully modernizing the building, which was built in 1983, and brought it up to Class-A standards.
“The Laguna represented a rare opportunity to acquire a fee-simple interest in a medical office building located on-campus to one of the premier hospitals in Orange County,” said Meridian’s Vice President of Acquisitions, R.J. Sommerdyke. “The Laguna Hills submarket has exceptional demographics; approximately 50% of the population within a one-mile radius of the property is 65 or older, which is the demographic that accounts for the highest per capita healthcare spending. We are thrilled to have created an environment that provides the community access to the best care available.”
Sommerdyke continues, “Our scope of work was extensive and included aesthetic upgrades to the common areas including the lobby, hallways, and restrooms and upgrades to building systems including HVAC and lighting, adding fire sprinklers throughout the entire building as well as various other ADA upgrades.”
Evan Kovac and Andrew Milne, both managing directors with JLL, represented Meridian in the sale.
“It was exciting to see our investment thesis play out on this property,” Sommerdyke noted. “When we purchased the asset in 2017, medical office vacancy was approximately 25% in this immediate submarket which scared a lot of other investors away. As we dug deeper, we realized the majority of the vacancy was in a neighboring building that was outdated and therefore had become out of favor with tenants. However, at the time of our acquisition, that building was undergoing a major renovation to reposition the asset. The submarket had very strong fundamentals given its proximity to a major hospital, a great payor mix, and a limited amount of medical office supply. We felt strongly that once the renovations of the neighboring building were completed, there would be significant absorption and vacancy would fall in line with the larger Orange County market (approximately 8%), which is exactly what happened.”
“We take great pride in the opportunity to help improve the facilities where healthcare providers deliver the critical care that we are all so dependent on,” said Meridian CEO, John Pollock. “Meridian has a healthy pipeline with multiple projects currently in escrow and several completed projects listed for sale in our healthcare business platform. With approximately 500,000 square feet currently in development/redevelopment, plus another 500,000+ square feet in the development pipeline, we are still looking for more acquisition opportunities throughout California, the Pacific Northwest and the Southwest. We have a tremendous appetite for land and buildings where we can bring our expertise to bear and create value.”
Founded in 1999, 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 management. For more information, see?www.mpcca.com.
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