SoCal's Healthcare Market Is Booming

LOS ANGELES—Since expanding to the Southern California market, healthcare asset manager and investor Meridian has experienced incredible growth, and it isn't slowing down. The firm has hired healthcare leasing specialist Michelle Lagos was hired as the senior asset manager to play an active role in the management of Meridian's Southern California portfolio, and she will be based in the firm's Pasadena market. To find out about the firm's strategy, its approach to healthcare management and how Lagos' plans and goals for the portfolio, we sat down with her for an exclusive interview. Here, she tells us all about the Southern California healthcare market.

GlobeSt.com:  What is your approach to healthcare asset management?

Lagos: My approach to healthcare asset management aligns with Meridian's approach. From day one I knew that I would be able to work within my core values of providing quality service and improving the patient experience by creating a holistic environment within our healthcare real estate assets. Meridian provides quality medical office real estate through improved ADA accessibility, code compliance and aesthetics. Meridian also takes a hard look at operating expenses and streamlines the operations through both systems upgrades and contract negotiation. The result is a more accessible, patient-friendly and healing environment that is both welcoming and efficient.

GlobeSt.com:  How is healthcare asset management unique from managing other assets?

Lagos: Healthcare is a very tight-knit community, even within the greater metropolitan areas. Most medical office tenants are likely to interact with each other on a regular basis. Because of this closeness, word of mouth travels even faster and that means that your reputation and correspondence with clients is a vital component to the success or failure of your strategy. Your trust and reputation are two of the most important things you must protect. It's hard to build both and they are easily tarnished if you are not treating the physicians with respect and responsiveness. I guess you could say “The stakes are greater” when it comes to client interaction and the implications of a negative exchange can impact you more quickly in a medical office.

GlobeSt.com: You recently joined Meridian as a senior asset manager. What are your goals in this position?

Lagos: My goal is to collaborate with my colleagues at Meridian to help implement the firm's Southern California healthcare expansion. We want to expand the Meridian brand within Southern California for providing quality medical office through enhanced and improved care spaces. As the senior asset manager, I become involved on a project prior to purchase, through the completion of capital upgrades, and into the project's stabilization. My role is increasingly important because as the project passes from acquisition to project management and operations, I ensure that the focus of quality health care environments isn't lost in transition and that the providers and patients are still our top priority.
GlobeSt.com: Tell me about the company's recent growth, and what is happening in this market to drive this growth.

Lagos: Meridian expanded their healthcare platform focus to include the Southern California medical market last year. Meridian had been eyeing the Southern California market for quite some time. We like the Los Angeles/Orange County/San Diego markets because the transaction volume is substantially greater than that in Northern California. We believe this is due to the combination of market size as well as the fragmented medical market, particularly in Los Angeles. The data we've reviewed shows that the volume of assets traded is roughly three times that of what we have in the Bay Area.

GlobeSt.com: Tell me about your acquisition strategy, and any acquisitions that you can share.

Lagos:  Our team is actively pursuing medical office value-add opportunities of two types: on and near-campus medical office buildings that can accommodate large practices; and off-campus buildings that can accommodate mid-sized to large outpatient clinics as much of health care continues to move off-campus. In Southern California, we are looking at buildings 20,000 to 150,000 square feet throughout the Los Angeles, Orange County and San Diego markets. It is the same requirement for Northern California. Our purchase of the Cotton Medical Center in Pasadena was Meridian's entrance into the Southern California market and presented a great opportunity to acquire two campuses-adjacent medical office buildings. These buildings require modernization to continue competing in the medical office environment of today. From operational to aesthetic improvements, our strategy is providing an environment that patients and physicians enjoy; as the patient experience is now increasingly linked to the revenue of our providers. This incentive alignment between proactive landlords and physicians will create an increasing burden on older, dated buildings in markets where outpatient care intensifies.

LOS ANGELES—Since expanding to the Southern California market, healthcare asset manager and investor Meridian has experienced incredible growth, and it isn't slowing down. The firm has hired healthcare leasing specialist Michelle Lagos was hired as the senior asset manager to play an active role in the management of Meridian's Southern California portfolio, and she will be based in the firm's Pasadena market. To find out about the firm's strategy, its approach to healthcare management and how Lagos' plans and goals for the portfolio, we sat down with her for an exclusive interview. Here, she tells us all about the Southern California healthcare market.

GlobeSt.com:  What is your approach to healthcare asset management?

Lagos: My approach to healthcare asset management aligns with Meridian's approach. From day one I knew that I would be able to work within my core values of providing quality service and improving the patient experience by creating a holistic environment within our healthcare real estate assets. Meridian provides quality medical office real estate through improved ADA accessibility, code compliance and aesthetics. Meridian also takes a hard look at operating expenses and streamlines the operations through both systems upgrades and contract negotiation. The result is a more accessible, patient-friendly and healing environment that is both welcoming and efficient.

GlobeSt.com:  How is healthcare asset management unique from managing other assets?

Lagos: Healthcare is a very tight-knit community, even within the greater metropolitan areas. Most medical office tenants are likely to interact with each other on a regular basis. Because of this closeness, word of mouth travels even faster and that means that your reputation and correspondence with clients is a vital component to the success or failure of your strategy. Your trust and reputation are two of the most important things you must protect. It's hard to build both and they are easily tarnished if you are not treating the physicians with respect and responsiveness. I guess you could say “The stakes are greater” when it comes to client interaction and the implications of a negative exchange can impact you more quickly in a medical office.

GlobeSt.com: You recently joined Meridian as a senior asset manager. What are your goals in this position?

Lagos: My goal is to collaborate with my colleagues at Meridian to help implement the firm's Southern California healthcare expansion. We want to expand the Meridian brand within Southern California for providing quality medical office through enhanced and improved care spaces. As the senior asset manager, I become involved on a project prior to purchase, through the completion of capital upgrades, and into the project's stabilization. My role is increasingly important because as the project passes from acquisition to project management and operations, I ensure that the focus of quality health care environments isn't lost in transition and that the providers and patients are still our top priority.
GlobeSt.com: Tell me about the company's recent growth, and what is happening in this market to drive this growth.

Lagos: Meridian expanded their healthcare platform focus to include the Southern California medical market last year. Meridian had been eyeing the Southern California market for quite some time. We like the Los Angeles/Orange County/San Diego markets because the transaction volume is substantially greater than that in Northern California. We believe this is due to the combination of market size as well as the fragmented medical market, particularly in Los Angeles. The data we've reviewed shows that the volume of assets traded is roughly three times that of what we have in the Bay Area.

GlobeSt.com: Tell me about your acquisition strategy, and any acquisitions that you can share.

Lagos:  Our team is actively pursuing medical office value-add opportunities of two types: on and near-campus medical office buildings that can accommodate large practices; and off-campus buildings that can accommodate mid-sized to large outpatient clinics as much of health care continues to move off-campus. In Southern California, we are looking at buildings 20,000 to 150,000 square feet throughout the Los Angeles, Orange County and San Diego markets. It is the same requirement for Northern California. Our purchase of the Cotton Medical Center in Pasadena was Meridian's entrance into the Southern California market and presented a great opportunity to acquire two campuses-adjacent medical office buildings. These buildings require modernization to continue competing in the medical office environment of today. From operational to aesthetic improvements, our strategy is providing an environment that patients and physicians enjoy; as the patient experience is now increasingly linked to the revenue of our providers. This incentive alignment between proactive landlords and physicians will create an increasing burden on older, dated buildings in markets where outpatient care intensifies.