At the time, Meridian's strategy was to offer the project for sale as whole buildings and as individual condo units as an unfinished shell or built-out to user's specifications. "With its prominent location, we felt we could attract a mix of both professional and medical users," notes Meridian's COO John Pollock. "The marketplace had a low vacancy at the time of our acquisition, 5.5% vacancy. However, that quickly changed when the market crashed."

Meridian completed the development in October 2008, within 30 days of the collapse of Lehman Brothers on September 15, 2008. As the market plummeted, vacancies in the area spiked above 20%, creating an enormous challenge for Meridian's sales and leasing efforts.

According to Pollock, in early 2010, during the depth of the recession, Meridian had an offer from a local developer to purchase the complex at $56 per square foot. However, Meridian instead worked to achieve sales prices greater than $100 per square foot. The final unit, a 1,827-square foot condominium unit located at 4939 Calloway, Suite 103, sold for $105 per square foot, which was consistent with the sale of similar units within the Meridian Professional Center, Pollock says.

Pollock exclusively tells GlobeSt.com that “Meridian learned many valuable lessons with this development… that successful projects need to be flexible." He says that “Having the ability to market to medical and professional users, having a variety of units sized from + 2,000 square feet up to 11,000 square feet and/or having the ability to lease or sell units was key to this project's success.”

He tells GlobeSt.com that prior to the Affordable Care Act, a lot of doctors wanted to own their own space as a means to participate in the appreciating real estate market and/or to have an investment for retirement, thinking they would sell their practice and lease the space to the new owner.

“With all the changes that have occurred due to ACA, more and more doctors are joining providers or a foundation, and the demand for smaller space that can be owned by a physician has declined dramatically,” he says. “Since the implementation of the ACA, most of the buyers have been primarily dentists or other professionals, and not physicians.”