By Eric Althoff
PASADENA, Calif.—Real estate developer Meridian, which owns several medical office spaces, has completed the sale of the Cotton Medical Center to Healthcare Realty Trust. The medical center is located at 50 Bellefontaine St. and 50 Alessandro Pl., adjacent to Huntington Memorial Hospital in Pasadena.
The Cotton Medical Center consists of two multi-tenant office buildings comprising 115,000 square feet of medical use space. The price was not disclosed, but the Healthcare Realty Trust has previously focused on managing and developing similar medical facilities around the country.
Meridian first acquired the Pasadena property in early 2016, at which time the buildings were 71 percent occupied. Since the 2016 purchase, Meridian has undertaken $10 million of renovations to both the interior and exterior of the buildings, bringing up the occupancy rate to 80 percent in the process.
“This was Meridian’s largest acquisition at the time and provided an opportunity to acquire a fee-simple interest in a fundamentally strong market in Southern California,” said Meridian Vice President of Acquisitions R.J. Sommerdyke. “In addition to Cotton Medical Center’s proximity to the hospital, access to LA Metro’s Fillmore Station and convenient access to the 110, 210 and 134 freeways were also influencing factors in the acquisition.”
According to Heidi Duffy, Meridian asset manager, the scope of renovation work included installing new wayfinding signage throughout the buildings, updating common areas, elevator modernization, installing fire sprinklers, Title 24 and ADA upgrades, automated parking equipment, new café, electric vehicle charging stations, installing high-efficiency HVAC, and updating lighting systems throughout.
“We wanted to make sure we capitalized on this opportunity by not only modernizing the buildings, but also improving the patient experience, which we definitely accomplished,” Duffy said.
CBRE’s Los Angeles office facilitated the leasing efforts at the property itself. Both buyer and seller self-represented in what was described as a direct-sale transaction.
“This asset purchase, reposition and lease-up is a prime example of our core business,” added Sommerdyke. “Improving the patient experience and the working environment and efficiencies for healthcare providers is our primary mission.”
Sommerdyke added that Meridian is developing or redeveloping 500,000 square feet at present throughout the Pacific region, and is also looking at more such developments in the Southwest and Pacific Northwest as well.
“We really have an appetite for land and buildings where we can bring our expertise to bear and create value,” he said. “Meridian has a healthy pipeline with multiple projects currently in escrow and several completed projects listed for sale in our healthcare business platform.”
Meridian was founded in 1999 in San Ramon, California. The firm specializes in healthcare real estate in top markets, providing services such as site evaluation and planning, construction and management. The firm has two offices in California as well as others in Seattle, Phoenix and Dallas.