Colliers International has negotiated the $37.5 million sale of 42-year-old Cotton Medical Center in Pasadena with the new ownership intending to invest as much as $15 million to re-purpose it into a modern, competitive and state-of-the-art healthcare facility. A team of brokers from Colliers Health Care Properties Group, Angie Weber, Dana Nialis and John Wadsworth, have been named the center’s exclusive leasing representative.
Meridian Property Company, a full-service owner and developer of medical offices and healthcare-related properties based in San Ramon, Calif., purchased the once-iconic property near Huntington Memorial Hospital from a group of doctors, some of whom had been part of the original investors and first tenants of the center.
Originally envisioned by its namesake, Dr. Bert Cotton, the medical 115,000-square-foot center was developed on a 2.6-acre site in 1974 with the 53,000-square-foot “North Tower” completed first at 50 Bellefontaine St. The “South Tower” and adjacent parking garage at 50 Alessandro St. were developed 10 years later to accommodate the increasing need for space and services supporting Huntington Hospital.
But in the past few years, the rapidly changing needs of health care providers pushed tenants to migrate to newer facilities. Meridian saw its acquisition of Cotton as an outstanding opportunity to enter the Southern California real estate market and reposition Cotton to a modern state of the art medical facility, Weirick noted.
Meridian has earmarked an initial $5 million in capital expenditures in order to immediately begin renovations on what is its largest acquisition to date. It will focus first on modernization, efficiency, safety, ADA compliance and mechanical improvements. According to Meridian Chief Operating Officer John Pollock, while the center’s buildings are well-located, their interiors and amenities have not kept pace with the marketplace and the occupancy reflects this difference.
“By the time all is said and done on the purchase and renovations, Meridian will have spent nearly $50 million in acquisition and construction costs,” said Colliers Executive Vice President Brent Weirick who, along with Senior Vice President John Erickson, represented Meridian in the purchase.
“Not only is the largest acquisition for Meridian, this is arguably its most challenging,” Erickson added. “But their efforts will result in a state-of-the-art center that will be in high demand by medical firms, physicians and other healthcare professionals.”
Colliers is confident it can successfully market the newly renovated center and has assigned an experienced three-broker team from its Health Care Properties Group to lease the two structures, including veteran broker and team leader Senior Vice President John Wadsworth. He will be joined on the leasing and marketing team by Vice President Angie Weber and Associate Dana Nialis, both of whom also specialize in medical properties as part of Colliers dedicated Health Care Properties Group.
Key selling points for the leasing team will include the fact that Cotton Medical Center is on the campus of nationally renowned Huntington Hospital. Additionally, demand should be high for the renovated space due to the fact that MOB submarket in Pasadena has a declining vacancy rate of 10% with increasing demand.
Cotton also contains the largest contiguous vacant floor plates within the submarket and that is another selling point for medical tenants looking to consolidate their operations, or bring several divisions together at one location.
To see the Colliers exclusive lease offer, click here.