Meridian, a full-service real estate developer and owner of medical real estate, is pleased to announce that the firm has closed escrow on the purchase of a 53,500-square-foot, two-story medical office building in Santa Ana, California. The purchase price was $20.35 million and Meridian plans to invest an additional $5 million in building improvements.
The property is located at 3601 West Sunflower on a 4.8-acre parcel adjacent to some of Orange County’s newest and most exciting retail and office projects in what is known as the SOCO (South Coast) submarket of Orange County. “We are very excited about the location of this building,” said Meridian Vice President, Acquisitions, R.J. Sommerdyke. “The area is in the process of undergoing significant revitalization and our property is located directly across the street from The Press, a 430,000-square-foot creative office and food hall concept which is scheduled to open in 2020. We expect The Press to become a major destination for Orange County residents and it will be a great amenity for tenants in our building.”
“The building was being sold 100% vacant and was attractive to us for a variety of reasons,” continued Sommerdyke. “Primarily we like the market and are strong believers in the transformation that is occurring here. There is a lack of quality medical office product in the area and there are no large blocks (10,000 square feet and larger) of medical office space available within 3.5-miles of the property. And, with the recent growth in this area, we expect that there is a strong demand that needs to be fulfilled.”
Constructed in 2000, the building was originally built as a special-use building for a culinary and arts school. The school went bankrupt earlier this year and that prompted the owner to sell.
According to Sommerdyke, “The building is well designed and can accommodate the needs of modern healthcare providers due to the large, functional floor plates, high-ceiling heights and abundant parking (7:1,000 ratio). Our renovation plans include updating the common areas, landscaping and major mechanical systems in order to fully convert the building to medical office.”
During escrow, Meridian was able to secure its first tenant, a large healthcare provider, for roughly half of the building on a long-term lease. Meridian will be marketing the second-floor space (approximately 26,000 square feet) to medical office tenants.
“This is another great example of Meridian’s ability to identify opportunities in niche markets, leverage our medical relationships and move quickly to close transactions,” said Meridian CEO, John Pollock. “The conversion of this building to medical office will allow providers to serve a broad range of patients in an environment that can provide the best care available. We’re particularly excited about this project because it is a great representation of what Meridian strives to do every day, which is to provide greater access to care and enhance the patient experience.”
Jon Sweeney, President at CXI Realty of Long Beach, California and George Thomson, Senior Managing Director at Newmark Knight Frank in Irvine, California, represented the seller, a local private investor, in the transaction.
Meridian was represented by John Scruggs, Managing Director at Newmark Knight Frank in Irvine, as well as Justin Hodgdon, Senior Managing Director, also from Newmark Knight Frank’s Irvine office. Scruggs and Thomson will manage the continued leasing of the building.
According to Sommerdyke, Meridian has approximately 500,000 square feet currently in development/redevelopment, plus another 500,000+ square feet in the development pipeline and is still actively looking for more real estate opportunities throughout California, the Pacific Northwest and the Southwest.
For more information, see www.mpcca.com.