MODESTO, ca—Modesto is recording heightened demand for medical facilities due to rapid growth in the area. And, providers are looking to expand services in a lower cost, higher quality and more efficient manner.
With the lack of vacant land, the trend will continue of repurposing obsolete pieces of land or buildings and converting them into more pedestrian-friendly uses. One example is a recently purchased site at 1328 Coffee Rd. consisting of a vacant 39,204-square-foot parcel.
The parcel purchased by Meridian marks the firm's second acquisition of 2018 and 10th acquisition in 24 months. The price was not disclosed, however, Meridian is investing nearly $6 million in the development of the ambulatory outpatient clinic including land acquisition cost, according to John Pollock, Meridian CEO.
“Finding a parcel that meets all of the criteria for a client continues to be a tall order in an environment where landowner expectations on sales price often exceed the realities of the market,” Pollock tells GlobeSt.com. “Healthcare providers want brand-enhancing locations with great visibility, ease of access for their patients with ample parking and nearby public transportation, and a project that makes economic sense. After a lengthy and exhaustive search with the help of great local brokerage teams, Meridian arrived on the Coffee Road site, which met all of the client's requirements.”
Meridian plans to build an 11,250-square-foot office of statewide health planning and development-3 ambulatory outpatient facility. The new facility is expected to be completed in 2019.
“In order to make this development feasible, Meridian had to work closely with city officials to rezone this site from residential to professional office with a parking variance, which included the ability to place medical on the site,” Mike Conn, senior vice president, tells GlobeSt.com. “This entitlement strategy exemplifies how the Affordable Care Act has impacted the traditional hub-and-spoke model to move specialty clinics off-campus rather than feed the patients back to the main clinic.”
Beau Plumlee, senior vice president and principal in Colliers International's Fresno office represented Meridian in the transaction. Duke Leffler in PMZ Real Estate's Modesto office represented the seller, a local family trust. The building is being designed by Harriman Kinyon Architects of Walnut Creek, CA and is being constructed by H2 Builders of Napa, CA.
“This is our second ground-up project in Modesto. We built our first clinic there in 2015 and it was extremely successful,” said Lorenzo Brooks, director of acquisitions for Meridian. “We are very pleased that our client finds value in our ability to unlock difficult off-market sites for new development. The property is located just down the street from Sutter's Memorial Medical Center and sits less than a block away from a variety of neighborhood amenities. Moreover, the site's proximity to additional medical and retail space make it a great fit for our client. This particular site is much narrower than most developments we've done for our client.”
This acquisition comes on the heels of Meridian's 2.06-acre purchase in Stockton earlier this year. Meridian also recently completed the construction of two outpatient facilities located in Oakland and Castro Valley, CA.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
