From changing healthcare legislation to a dated stock of properties, the medical office real estate market is changing. Meridian, recently hired Cypress West as the property manager for a 115,000-square-foot medical office complex in Pasadena. As the market has changed, property management has become increasingly important to the real estate office niche. To find out how Meridian is approaching property management, what the tenant demand is like and how changing legislation is playing a role in their business strategy, we sat down with Meridian CEO John Pollock for an exclusive interview.

GlobeSt.com: What is your approach to medical-office management?
John Pollock: As most of our projects involve extensive capital improvements that can be disruptive to our tenants, it imperative that we work with a best-in-class property management firm, who shares our core values and desire to provide first-class service to our tenants. Recently, we entered into a relationship with Cypress West Partners in Southern California to manage our buildings in Pasadena.

GlobeSt.com: The medical office market has evolved tremendously in recent years. Pollock: How has property management of medical office assets also evolved?
Technology has given us access to more information at the touch of a button to better manage our assets, from dashboards that give us up to the minute stats on the operations to work electronic work-order requests. In this rapidly-changing environment, the one thing that remains constant is the need for human interaction, it is vital to create the personal connection and to listen to our tenants to make sure we are delivering a space that serves their needs and their patients' needs.

GlobeSt.com: What is tenant demand like for these properties?
Pollock: Most of our multi-tenanted assets are older and require extensive work to allow them to remain relevant in the ever-changing healthcare delivery paradigm. Once the improvements are completed and we are able to provide a high-quality building (Class B+) at a more affordable rate than a newer Class A building, we see an immediate increase in demand. Meridian has a simple formula; provide quality space at lower rates and we think this resonates with our tenants who are struggling to provide great healthcare in a system with declining reimbursements.

GlobeSt.com: Is there concern about ACA changes could affect tenancy or other aspects of medical office?
Pollock: Uncertainty makes it difficult to plan and we are cautious given the paralysis that set-in back in 2010, with the implementation of the ACA, but for now it appears our tenants and providers are taking a business as usual approach to planning for the future.

GlobeSt.com: What are the biggest concerns from your clients, and how do you overcome them?
Pollock: A lot of providers are consolidating or joining larger practices, where they can gain some economies of scale and operational efficiencies and the right space, both size and layout, which can help to streamline a provider's operation.

GlobeSt.com: As a property manager/owner, what is your advice to owners of medical office properties?
Pollock: If you own an older building, you have to take a hard look to make sure it can meet the demands of the new healthcare delivery system. If it will work, then you must be willing to make the substantial investment to improve the building to be successful.

GlobeSt.com: Tell me about your expansion plans for Southern California and Los Angeles.
Pollock: We are hunting for the right buildings where we can deploy our expertise and deliver a great, newly-renovated building at fair rate to the healthcare providers. More and more we are finding it difficult to find those assets and are turning our attention to new development to satisfy tenant / provider demand. In Southern California, Meridian currently has sites in escrow in Long Beach and Hawthorne, and we are working through the entitlement process on both sites for new ground-up clinics. Outside of Southern California, we are in escrow to purchase a 50,000-square-foot medical office building in Phoenix, Arizona, Meridian's first acquisition outside of California.

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A Property Manager's Guide to Medical Office

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