Historic Grunow Memorial Medical Center sells for $17.9 million

Meridian, a full-service healthcare real estate owner, operator and investor, is pleased to announce that the company has entered into an receivership for the sale of Grunow Memorial Medical Center. After renovating and repositioning the 53,000 square foot medical office building in Phoenix, Arizona, Meridian sold the building to a private Canadian investor for $17.9 million.

The building is located in Phoenix’s historic Coronado neighborhood at 926 E. McDowell and is adjacent to the Phoenix campus of Banner Health University Medical Center and Phoenix Children’s Hospital. “The building was constructed in 1931 and originally designed by Arizona architect Lester A. Byron. It was one of the first such clinics in Arizona where doctors could be located near a hospital. It also created the opportunity for patients to see their doctor in a more residential setting rather than having to travel downtown,” said Meridian Director of Assets Dan Rosenbaum.

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Meridian acquired the building from PacVentures in August 2017 for $5 million, when it was 25% leased. “The property is now approximately 90% leased to 12 tenants, including DaVita Dialysis and a well-known regional infusion group,” Rosenbaum continued. “The acquisition of Grunow Memorial Medical Center represented Meridian’s first major transaction outside of California. This repositioning is a great example of how Meridian is leveraging its medical expertise to expand into new markets and meet our clients’ real estate needs.

“This project represented an exciting, value-added opportunity where we could help our clients with their outpatient outpatient strategy,” Rosenbaum said. “We added fire sprinklers to the entire building, upgraded the ADA, replaced the HVAC, reduced the load factor by reconfiguring the space, and updated many second-generation medical spaces for our users.”

After Meridian’s repositioning was completed, Meridian formed a joint venture with Harrison Street Real Estate, a Chicago-based investment management firm, for the property’s 2019 recapitalization to provide creative ambulatory healthcare real estate solutions that result in better access to care and increased efficiency. We have trusted Harrison Street to be our partner in the remaining rental and ownership of the property,” Rosenbaum said.

“The renovation turned out to be great and provided a much better patient experience and environment to meet the demands of modern healthcare providers,” Rosenbaum said. “The project filled a market need and is a great example of Meridian executing our vision and creating value.”

The clinic was built in memory of Lois Anita Grunow, a seven-year-old girl who died of a ruptured appendix. The front of the grand entrance and the majority of its large windows are adorned with intricate stone carvings that reference symbols of the medical profession. These designs continue in the historic two-story open lobby, which contains various commemorative plaques for doctors who have come and gone, as well as large hanging murals that depict significant milestones in the history of medicine.

“The history of this building is truly amazing,” Rosenbaum said. “It is considered one of the first Spanish Colonial Revival style buildings in Arizona and although the property itself has grown over the decades, the original structure and its stunning facade are still intact today .”

Meridian was represented by Mindy Berman of JLL, Senior Managing Director, Group Head of Capital Markets and Healthcare, in connection with the transaction.

Meridian currently owns and manages healthcare properties in the western United States. According to Rosenbaum, Meridian is actively pursuing acquisitions and developments in the western United States and is focused on opportunistic, value-added, core plus, adaptive, and tailored reuse with leading healthcare systems and medical partners.

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