Meridian John Pollock medical-office buildings healthcare real estate
Meridian is responding to this trend with more MOB acquisitions. The firm recently purchased the Laguna, a 57,057-square-foot medical-office building at 24022 Calle de la Plata here from a private investor. While Meridian declined to comment on the purchase price, Garth Hogan, executive managing director of Global Healthcare Services with Newmark Knight Frank in Newport Beach, tells GlobeSt.com, “We are seeing on-campus buildings like this one trade around $350 per square foot to $400 per square foot.”
The acquisition comes on the heels of last year's purchase of Cotton Medical Center, a 115,000-square-foot, $49-million medical office complex in Pasadena, CA, adjacent to the recently completed Shriners Hospitals for Children and near the Huntington Memorial Hospital.
The Laguna medical-office building is on the campus of and adjacent to Saddleback Memorial Hospital, a 325-bed hospital recently designated by Healthgrades as one of the top 50 hospitals in America. The five-story MOB is located across the street from the former Laguna Hills Mall, which is being redeveloped into an indoor-outdoor retail center and urban village called Five Lagunas, and adjacent to the Laguna Woods Village, one of the largest 55-plus communities in Southern California.
We spoke with Pollock about the acquisition, the increased demand for large MOBs, what's changing about how medical-office space is being used in this market and what makes for “top-quality” medical space today.
The Laguna is on the campus of and adjacent to Saddleback Memorial Hospital, a 325-bed hospital recently designated by Healthgrades as one of the top 50 hospitals in America.
GlobeSt.com: What makes the Laguna a smart investment for your firm?
Pollock: One of the key factors that attracted us to this opportunity was that this asset offers one of the few large contiguous blocks of medical-office space in South Orange County. With the growing trend of consolidation throughout the healthcare industry, we've seen a tremendous increase in demand for larger blocks of space. We feel confident that the Laguna is very well positioned to accommodate some of the larger groups that are in this market.
GlobeSt.com: Why is there an increased demand for larger blocks of medical-office space in Orange County?
Pollock: The need for larger blocks of space in Orange County is driven by industry consolidation. Increasingly, physicians are joining regional groups and regional groups are being acquired by systems so they can achieve greater market share, economies of scale and brand awareness.
GlobeSt.com: What's changing about how medical-office space is being used in this market?
Pollock: As the industry consolidates it is moving away from the individual practitioner office that was historically housed in older woody-walk-up facilities. Regional groups and systems want space that is consistent with their brand, visible within the community and enhances the patient experience.
GlobeSt.com: What must healthcare real estate offer in order for it to be considered “top-quality space”?
Pollock: Providing best-in-class space today requires three things:
- Accessibility: Above all it needs to be well located, easy to find and easy to navigate and it must have ample parking.
- Patient Experience: Much of the patient experience is driven by the interaction between the patient and provider. We work together with our tenants to ensure that the physical space is inviting, well cared for and up to date, with an uplifting modern feel, coupled with important amenities: WiFi that is ubiquitous throughout the building, thoughtful outdoor space that balances nature and function, clear way-finding, ample seating and, where possible, proximate to retail
- Functionality: Reimbursements continue to shrink, and our tenants are having to do more with less. Having functional space that allows them to reduce their footprint and see more patients while maintaining a great patient experience is vital to their business model.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
