Case in point: Meridian Property Co., under the guidance of its Southern California acquisition manager Andrew Saba, bought Cotton Medical Center, a 115,000-square-foot medical office complex in Pasadena for $37.5 million in a deal that closed this morning. It’s the first time in 40 years the two-building property at 50 Bellefontaine Street and 50 Alessandro Place has traded hands.
Meridian, which is a division of Marcus & Millichap, paid $303 a square foot to the seller, a limited liability corporation called Cotton Medical Center. Cotton is a partnership of doctors led by managing partner Dr. Bill Chin. Many of them were part of the original development group and had offices in the mid-rise complex, comprised of one building that was built in 1975 and another in 1985.
The sale price would have been on the low side, were it not for the fact that Meridian plans on spending between $3 and $5 million on renovations to the property that will increase its value, rents and occupancy, said Linda P. Lee, senior managing director at Charles Dunn Co.’s Glendale office. Lee represented the seller along with William Boyd and Scott Unger of the same office, as well as Fred Cordova, Ryan Eddy and Michael Puleo of Kennedy Wilson Brokerage Group. John Erickson and Brent Weirick of Colliers International represented Meridian.
Meridian will upgrade the common areas and improve the exterior of the building, Lee said. It expects that the improvements will increase rents and occupancy at the property, which is at 75 percent, and ultimately make the building value rise well beyond $400 a square foot. With those expectations, the price was quite affordable, she said.
Healthcare Partners, Quest Diagnostics and Lab Corp. are the three biggest tenants of the 38 in the complex.