Watsonville Dialysis The siteis located at 58 Hanger Way and 5 Neilson St. adjacent to theWatsonville Community Hospital.

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WATSONVILLE, CA—After a five-year search, Meridian recentlypurchased two vacant parcels totaling 1.15 acres with the intent todevelop an 11,424-square-foot outpatient ambulatory clinic to servethe critical needs of dialysis patients in the area. The land islocated at 58 Hanger Way and 5 Neilson St., directly adjacent tothe Watsonville Community Hospital and the Watsonville Hospitalemergency room.

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Construction is expected to commence in April with completionslated for January 2021. The planned investment including land isestimated to total approximately $10 million for the ground-updevelopment project.

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"This was a vacant, undeveloped parcel of land that wasunderutilized and zoned industrial," said Mike Conn, executive vicepresident of Meridian. "We worked with our seller, the city ofWatsonville and the community to process a general plan amendment,special use permit, design review and lot merger to rezone theparcel to N-Institutional, where dialysis and other medical usesare permitted. Thanks to excellent cooperation from the city ofWatsonville planning staff, economic development department andcouncil member Lowell Hurst, Meridian was able to process thesecomplicated entitlements in under three months."

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Conn says after a five-year search in the Watsonville/Santa Cruzsubmarkets, this land did not materialize a moment too soon.

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"The dialysis patient base in this area often has to commute upto an hour each direction three times per week to receive theirtreatment," he says. "Our new facility will truly impact the livesof these patients and their loved ones who support them while theyundergo this life-saving treatment. Meridian prides itself onenhancing the patient experience by providing greater access tocare at a more affordable cost. The project will consist of an11,424-square-foot building with 49 parking stalls. The facade willinclude a three-color stucco scheme, decorative steel canopies andNichiha wood paneling to create depth and articulation in thebuilding elevations. The interior of the building will house up to36 hemodialysis stations constructed to OSHPD3 I-Occupancystandards."

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Randy Parker of JR Parrish in Santa Cruz represented theprevious owner/seller in the acquisition of the site and Meridianrepresented itself. Mark Caston of LaJolla-based Voit Real EstateServices represented the undisclosed new tenant. Walnut Creek-basedHarriman Kinyon Architects is the architect and Livermore-basedKier & Wright is the civil engineer.

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"This project is another example of the perspective thatMeridian brings to the table when partnering with healthcareproviders to solve their real estate requirements," John Pollock,Meridian's CEO, tells GlobeSt.com. "Meridian utilized ourentitlement, development and community outreach teams to bring thisproject to fruition. I am proud of the creativity and quick workthe team did to allow Meridian to transform this former industrialyard site into a world-class healthcare facility that will providegreater access to care and at a sustainable cost of occupancy forthe provider."

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According to Conn, Meridian has several other projects indevelopment/redevelopment, with a healthy development pipelineahead for 2020. Meridian is still actively looking to partner withhealthcare providers for more real estate opportunities throughoutCalifornia, the Pacific Northwest and the Southwest.

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"Meridian is an active participant in moving higher acuitytreatment out of the bed towers and into a convenient outpatientsetting," Conn tells GlobeSt.com. "As a percentage of GDP, theUnited States is spending too much on healthcare, and needs to findinnovative and cost-effective ways to improve care delivery.Patients are the consumers of healthcare services and are drivingchange. Millennials are demanding greater access to care,convenience and technology. Providers are adjusting their capitalstrategy plans to remain competitive and retain market share. Thisincludes establishing strong commercial/private payer mixes withthe hopes that local consumers will use these specialty servicelines in the future, which yield the providers higherreimbursements. Meridian uses its innovative approach to siteselection and land use/entitlements as well as its unique abilityto repurpose sites to contribute to the solution."

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US healthcare spending grew 4.6% in 2018, reaching $3.6 trillionor $11,172 per person. As a share of the nation's gross domesticproduct, health spending accounted for 17.7%, according to theCenters for Medicare and Medicaid Services.

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The National Health Expenditure Accounts/NHEA are the officialestimates of total healthcare spending in the United States. Datingback to 1960, the NHEA measures annual US expenditures forhealthcare goods and services, public health activities, governmentadministration, the net cost of health insurance and investmentrelated to healthcare. The data are presented by type of service,sources of funding and type of sponsor.

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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.