October 24, 2018globest.com
Meridian Plants Roots in Phoenix
Medical office investor Meridian is expanding into the Phoenix market. In response to the rapid market growth of the medical office market, Meridian is opening an office in Phoenix and has hired Sheila Schmidt as VP of development to be based in the office. The investor entered the Phoenix market only last year with the acquisition of Grunow Memorial Medical Center, a 51,150-square-foot two-story medical office, but has already seen the opportunities in the market.
“Last year, we were brought to Phoenix by a client who needed us to purchase a largely vacant medical office building that could accommodate their +10,000 square feet of contiguous space requirements,” John Pollock, CEO of Meridian, tells GlobeSt.com. “As a result, not only have we been pleasantly surprised by the outcome of that investment, but it helped us to see Phoenix’s market opportunity. The Southwest has attractive fundamentals with a high concentration of Boomers who continue to need more healthcare services as they age.” Schmidt will be responsible for the acquisition, management and development of healthcare properties. Phoenix is similar to some California markets, making it familiar to Meridian and ripe for both value-add and new construction projects. “The healthcare provider landscape is still fragmented with a lot of systems competing for patients, similar to some of the California markets, where we have historically operated, and we believe that a developer like Meridian, who can do both ground-up and adaptive re-use of existing buildings, will be able to deliver value to the market,” says Pollock. Like most markets, the healthcare systems are turning more of their attention to an outpatient strategy as a means to better serve their patients, provide care at the right level of acuity and to drive cost out of the system.”
While Meridian is expanding into a new market, its core investment strategy will be the same. “We plan to stick to our expertise and provide the same services that we provide across our platform,” explains Pollock. “We will take a client-centric approach to solve the healthcare real estate needs of the systems and the providers, from project management to ground-up development, to adaptive re-use of buildings where we transform tired/obsolete buildings into spaces that can provide a great patient experience with efficient layouts that lead to operational efficacies for our clients.”
Opening an office late in the cycle and entering a new market shows the runway of the Phoenix market. “The fact that we are in the longest expansion cycle since World War II, coupled with the recent stock market volatility, the changing economy seems to be a pressing issue in the minds of investors, providers and developers alike,” adds Pollock. “While I usually think that economists are about as reliable as weather forecasters, it does appear that most agree that underlying fundamentals are in-check and there isn’t a single event on the horizon that should disrupt the current economic conditions. That is not to say that we don’t face headwinds with raising interest rates and a scarcity of labor; but, what we love about the healthcare industry is the undeniable reality that as Boomers age they will require more healthcare.”