Meridian Sells Orange County MOB
The seller invested more than $2 million in the Laguna Hills property.
Meridian has sold The Laguna, a 57,573-square-foot medical office building in Laguna Hills, Calif., for $31.3 million. The buyer was Healthcare Realty Trust, public records show. JLL assisted the seller in the disposition.
“The Laguna was Meridian’s first acquisition in Orange County, and it opened the door to other local opportunities. Meridian has since acquired a 55,000-square-foot medical office building in the South Coast market of Santa Ana in addition to a 110,000-square-foot medical office conversion project that is currently under construction in the Irvine Spectrum,” R.J. Sommerdyke, vice president of acquisitions with Meridian, told Commercial Property Executive.
Meridian had bought the Class B asset in 2017 from Greenlaw Partners for $19.9 million, also taking out a $16.6 million loan from MUFG Bank, according to CommercialEdge data. Following the purchase, the firm invested more than $2 million into the property, bringing it to Class A standards, Sommerdyke said in prepared remarks.
Located at 24022 Calle de la Plata, part of the Memorial Care Saddleback Medical Center campus, the five-story building features 12,300-square-foot floorplates and ground-floor retail. The medical facility is leased to a diverse mix of health-care providers. Anchor tenants include South Coast Eye Center, Pacific Cardiovascular Associates, Pacific Hills Surgery Center and Simon Imaging, the seller confirmed for CPE.
The property is some 2 miles north of downtown Laguna Hills, just south of Interstate 5. The location is across from Laguna Hills Mall and Oakbrook Village, with many other shopping venues nearby.
JLL Managing Directors Evan Kovac and Andrew Milne represented Meridian in the deal. The brokerage duo was recently part of a team assisting Virtus Real Estate Capital and its joint-venture partner in the sale of a 47,600-square-foot medical office building in San Diego.
A growing medical office portfolio
For its Santa Ana property, Meridian secured a large health-care provider as tenant for 50 percent of the building during escrow. As for the Irvine property, Meridian is currently adding a three-level parking structure, necessary for medical occupancy. Leasing is also underway.
Meridian intends to remain bullish on the medical office sector: “There is a lack of quality medical office space in the market and rising construction costs are putting pressure on the viability of new development. As a result, we will continue to look for conversion opportunities where we can acquire buildings at a fraction of replacement cost and pass those savings along to our tenants,” Sommerdyke concluded.
Meridian CEO John Pollock said, in a prepared statement, that the company has approximately 500,000 square feet in development/redevelopment, with another 500,000 square feet in the pipeline. The company’s acquisition interests lie in California, the Pacific Northwest and the Southwest.
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