By Eric Althoff
MODESTO, Calif.—Real estate development firm Meridian, based in San Ramon, Calif, has completed the sale of a medical complex the company formerly owned at 1328 Coffee Road, located in the northeastern side of this Central Valley city.
Meridian first acquired the vacant lot on Coffee Road in April 2018, and immediately set about to develop a healthcare facility on the 39,204-square-foot piece of land. Meridian completed buildout of the dialysis clinic, which sits just down the street from Sutter’s Memorial Medical Center, in May 2019.
During construction of the dialysis center, Meridian meticulously planned a rezoning of the property, which at the time wasn’t zoned for medical usage. By planning for a dialysis center, Meridian was able to work around the proscription, the firm said. And because the site was smaller than others developed by Meridian, the company opted to utilize a driveway that was shared with the neighboring parcel of land. When completed, the dialysis center had space for 38 parking spaces.
The project architect for the dialysis center was Harriman Kinyon Architects of Walnut Creek, California. H2 Builders of Napa served as general contractor, assisted by civil engineer Kier & Wright of Livermore.
“Modesto is seeing heightened demand for medical facilities due to rapid growth in the area,” Mike Conn, Meridian’s executive vice president, said in a statement. “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.
“This particular site is much tighter and narrower than most developments we’ve done for a building of this size,” Conn added regarding the sale. “We had to structure a deal with the neighbor for a shared driveway to functionally lay out 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 sold the 11,250-square-foot dialysis center for $6.1 million. The identity of the buyer has not been disclosed, but the transaction with the buyer was a “1031 exchange” so that the buyer could ultimately diversify its portfolio into healthcare, Meridian announced. Meridian was represented in the transaction by Chris Sheldon of Cushman & Wakefield of San Francisco.
Even though Meridian has divested of the dialysis property, Conn maintains that the mission of kidney health remains important.
“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,” Conn said. “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.”
Meridian also recently sold another 13,600-square-foot medical building in Stockton, California. Conn said that Meridian is pursuing acquisitions and developments in the rest of California as well as the Southwest and Pacific Northwest.