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June 15, 2024
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Meridian Closes Out Active 2015 with $5 Mil Sale of Fairfield Dialysis Clinic


An 8.7k sf, dialysis clinic in Fairfield, CA was purchased for $5.15 mil ($592/sf) in a recent acquisition by a private investor in a 1031 exchange. The transaction came in at a cap rate of 5.5%. The property was sold by Meridian, who also two other CA dialysis clinics – in Pomona and Modesto -- earlier in the year.

The Fairfield clinic is located at 1800 North Texas St in Solano County, midway between the cities of San Francisco and Sacramento. Meridian’s other two clinics that sold were an 11.6k sf dialysis clinic located at 2703 South Towne Ave in Pomona, which sold for $6.3 mil, representing a cap rate of 5.54%; and an 11.6k sf dialysis clinic located at 3001 Healthcare Way in Modesto, which sold for $6 mil, representing a cap rate of 5.65%.

All three clinics are occupied by DaVita Healthcare Partners Inc. (NYSE: DVA), a leading provider of kidney care services. The dialysis clinics were all purchased by private investors who were in 1031 exchanges.

According to Meridian COO John Pollock, “Kidney failure, also known as end stage renal disease (ESRD), is a fatal condition unless a kidney transplant is available or a patient undergoes dialysis, in which a machine filters toxins and fluids from the blood outside the body. In-center dialysis patients are treated four hours a day, three times a week. There is a tremendous need to bring these types of services to where patients live.”

All three of the properties are located in a retail setting, says Pollock. “This provides easy access and convenience for patients and staff as they don’t have to navigate large and often confusing hospital entrances and parking garages,” Pollock explains. “This type of location also provides the clinics with a highly visible building and signage which contributes to an increased market share. Meridian expects this trend to continue in the coming years given the cost advantage and convenience factor of providing basic services in retail settings as opposed to higher acuity hospitals.”

This transaction comes on the heels of Meridian’s sale of its 69k sf medical office building located in Sonoma County at 5900 State Farm Drive in Rohnert Park, CA. The purchase price in that deal was $21.5 mil, representing a cap rate of 5.8%. The Rohnert Park property, which was sold in early November 2015, is occupied by Kaiser Permanente and Petaluma Health Center’s Rohnert Park Health Center.

In early October 2015, Meridian purchased a 19.2k sf medical office building located in Alameda County at 380 W. MacArthur Boulevard in Oakland, California. Meridian bought the property for $6 mil in an off-market transaction. Both of these deals were reported by RENTV at the time.

“Meridian will be closing out the year with more than 1.3 msf in development and acquisition. The properties are located in both northern and southern California,” Pollock says. "Meridian will continue to seek well-located suburban medical and general office value-add opportunities throughout California.”

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