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10/25/19
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Meridian has acquired a two-story, 53.5k sf medical office building in Santa Ana for $20.35 mil ($380/sf). The company plans to invest an additional $5 mil in improvements to the building, situated on a 4.8-acre parcel at 3601 West Sunflower,
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. The building was sold vacant.
The property is 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 430k sf 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 (10k sf 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.”
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 26k sf) to medical office tenants.
Jon Sweeney with CXI Realty and George Thomson with Newmark Knight Frank represented the seller, a local private investor, in the transaction. Meridian was represented by John Scruggs and Justin Hodgdon, also with Newmark Knight Frank. Scruggs and Thomson will manage the continued leasing of the building.
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