Heidi Duffy is an Asset Manager at Meridian, a full-service real estate developing and investing company. At Meridian, Heidi is responsible for analyzing the qualifications of prospective tenants, driving lease negotiations to secure profitable returns for Meridian’s portfolio, and overseeing the Western portfolio assets.
Heidi is the Vice President of the Building Owners & Managers Association (BOMA) of Oakland/East Bay Medical Office Building Special Interest Group and chairs their Annual Medical Office Summit. She graduated from California State University East Bay with a Bachelor of Science degree in Business.
Here’s a glimpse of what you’ll learn:
- Heidi Duffy talks about Meridian, their primary property types, and their two main business lines
- Meridian’s latest energy-efficient initiative
- Heidi shares the biggest challenge the company faced when COVID-19 first hit the U.S.: Where do you spend your money?
- Getting creative with your value line
- Heidi talks about one of Meridian’s residential projects: a historic California home that they bought and renovated
- How is the market in Tucson?
- Heidi notes some of the trends she’s noticing moving forward in asset management
- How Heidi got started in her industry
- Heidi’s advice for anyone looking to get into asset management: get involved
In this episode…
Think back to when you were a kid. What did you want to be when you grew up? The answers are usually the same. Doctor, firefighter, maybe a lawyer, or an astronaut. Many kids also dream of growing up to be artists. But, what if there was a job that would value your problem-solving skills, your outgoing nature, and your creativity equally?
According to Heidi Duffy, this job does exist—and it’s called asset management. At Meridian, Heidi handles the company’s Western portfolio assets, creates value lines, and oversees tenant improvements. Although Heidi started working at Meridian fairly early in her career, beginning as an office manager and then working in the marketing department, it took her some trial and error before she landed in asset management. Was all the pivoting worth it? For Heidi, the answer is simple: yes.
On this episode of Watching Paint Dry, Greg Owens sits down with Heidi Duffy, Asset Manager at Meridian, to talk about the world of asset management. Together, they discuss the importance of getting creative when adding value, the market in Tucson, and Meridian’s two main business lines. Plus, Heidi shares how she got started in the industry and how you can, too.
Resources Mentioned in this episode
- Greg Owens on LinkedIn
- Katrina (Hayes) Stephenson on LinkedIn
- McCarthy Painting
- McCarthy Painting Contact No.: 415-383-2640
- McCarthy Painting Email Address: info@mccarthypainting.com
- Heidi Duffy on LinkedIn
- Meridian
- Marcus & Millichap
- Building Owners & Managers Association (BOMA) Oakland/East Bay
Sponsor for this episode…
This episode is brought to you by McCarthy Painting, where we serve commercial and residential clients all around the San Francisco Bay area.
We’ve been in business since 1969 and served companies such as Google, Autodesk, Abercrombie & Fitch, FICO, First Bank, SPIN, and many more.
If you have commercial facilities in the San Francisco Bay Area and need dependable painters, visit us on the web at www.mccarthypainting.com or email info@mccarthypainting.com, and you can check out our line of services and schedule a free estimate by clicking here.
Episode Transcript
Intro 0:03
Welcome to the Watching Paint Dry podcast where we feature today’s top facility managers, property managers and property owners talking about the challenges and opportunities of managing hundreds of 1000s of square feet of real estate and how to beautify and improve their properties. Now, let’s get started with the show.
Greg Owens 0:31
Good morning. This is Greg Owens with the Watching Paint Dry podcast where we are continuing our series of talking to facilities managers, building owners, and all the types of services that support this entire industry, which is I think we heard that it was over a trillion dollar industry out there in the world. And this podcast is sponsored by my company McCarthy Painting. We do painting services throughout the San Francisco Bay Area, both residential and commercial. On the commercial side of painting, we’ve done work for Chase Bank, we just did a beautiful like redo of one of their banks. It was amazing to work for them. And then we’ve also done firstbank and Abercrombie and Fitch, h&m stores, and lots of other companies like spin new startup, automation, car automation, just a wonderful time to be out painting because the weather is perfect right now. super happy to have Heidi Duffy on the call today. She is asset manager at Meridian. And Also joining us is Katrina (Hayes) Stephenson, who it works for McCarthy Painting too. And sometimes she chimes in with questions as she’s learning all about this industry. Welcome, Heidi.
Heidi Duffy 1:56
Thank you. Yeah, thank you for the introduction. Happy to be here.
Greg Owens 2:00
Yeah. And I like to start because I know, these are challenging times. And we were just talking about that before we got on on the air and how are things going for you and your family? And personally, and I kind of have a
Heidi Duffy 2:11
lot of challenges, I think, you know, and it’s been all about adapting last year, right? It’s, you know, working from home. And I, you know, I were fortunate that my family has retained their health. And I think health and keeping our jobs right now are very important help being the number one, right, we wouldn’t be able to do our jobs if we didn’t have that. So I feel fortunate. You know, it’s all about perspective. So you go out in the world, and you know, you think you’re having a hard day, and then you look at someone else’s situation. So I don’t think I have anything to complain about. It’s been it’s been a different environment. But I’ve been fortunate where I am today, and I’m here. So I would say it’s going really well.
Greg Owens 2:57
Oh, that’s awesome. And what part of California are you located in and tell us a little bit about Meridian?
Heidi Duffy 3:04
Yeah, so I’m based in Northern California about 40 minutes outside of San Francisco. The Meridian is a California based developer, Marcus & Millichap is actually our parent company. We’re one of the subsidiaries of Marcus & Millichap being a national company. We are primarily based in California. With that being said, we’ve really over the last few years have had an initiative to expand on the west coast. So we have assets in Phoenix and Tucson. We just landed one of our first deals in Texas Fort Worth, Texas. So that was actually some really great news this week. And everything going on in Texas in the last couple weeks with weather to do something out there is great. So a lot of initiative to grow on the West Coast right now.
Greg Owens 3:58
Yeah, I’m wondering if the oil industry will now take climate change seriously, since Texas is frozen?
Heidi Duffy 4:04
I would hope so. I hope it’s a wake up call.
Greg Owens 4:07
Right. Right. Right. Katrina, do you have a question?
Katrina (Hayes) Stephenson 4:10
Well, I was watching the news last night about Texas and they just released all these sea turtles. They rescued them too old and like, you know, along the coast of Texas, and then they just released them all back and like, you know, how many turtles Well, how long is that going to go on? But we split the turtles were saved, which is great.
Greg Owens 4:29
That is great. It’s good. It’s good to hear. Yeah. And what types of assets Do you guys look for and what’s your primary sort of focus and types of properties?
Heidi Duffy 4:39
Yeah, so we really have two main business lines, healthcare services, which that’s our health care development, primarily is build asou ground up construction. Meridian is a full service developer. So we will design builds, we bring in the tenants and run the operation. Now a lot of that is third, you know, third party vendors that help to achieve our strategy. It’s a lot that goes into this. So that’s really our one of our main business lines. And we have purchased multi tenant health or medical office buildings. So existing that kind of goes into our value add line, where we’re looking at value added medical and general office buildings where we see just an upside, I always like to think of the value add site is flipping houses, I would consider us short term holders. So we’ll go in and put capital improvements into the value add assets lease up, we will, you know, bring new tenants in if there is current vacancy on the project, we really tried to increase vacancy, or sorry, increase occupancy or reduce vacancy who would have no one wants to reduce vacancy. So we have a lot of value value to add there. Those are really our two primary business lines.
Greg Owens 6:01
Right? So so you you go in and you you find a property that’s been sort of what under maintained or not looking so great or hasn’t been upgraded in a long time, and you go in and you you guys have a way of like looking at the property and going, Wow, we can make this so much nicer, redo, redo it, make it look pretty, and then get the right tenants in. And then a lot of times you’re turning around and selling it.
Heidi Duffy 6:25
Yeah, and it’s you know, it takes a creative eye, right, some of these buildings, maybe they’ve been managed great, but the lease up has been a struggle. So we bring in value there, or they’re just overstaffed. And we can reduce operating expenses. And that’s a huge thing, operating expenses. And if that’s passed back through to your tenants, or what that looks like, on the exit, is that that is a big part of our strategy. And that’s something that I primarily focus on. And it’s Yeah, yeah.
Greg Owens 6:57
Oh, see, you can see, like, Oh, this is a legacy building, it’s been here for a long time, they’re doing things, not as efficiently as you guys, you guys can look at it and say, Wow, we can come in and make this so much more efficient, and save, save money, and then reduce the cost for tenants to come in or higher quality tenants, and then you probably have, like, a good list of tenants that, you know, are looking for certain types of buildings.
Heidi Duffy 7:24
Really? Yeah. And it’s, you know, we actually just kicked off a initiative in the last couple of weeks for energy efficiency, which in California is huge, right, going back to climate change. And so we’re pretty excited about that. It’s, you know, focusing on our building systems, running them efficiently, and trying to reduce any pressure being put on these these large power plants, right. It’s, we don’t have any zero net buildings now. But hopefully, one day, that’s the goal, where I think you’re aware with that is, but really where you’re not, you know, you’re using all natural resources to run you’re building, you’re opening up the windows to cool it. And so it’s, it’s kind of neat to try to get to that point. But yeah, it’s, you know, sometimes owners, it’s not to their fault, right. But if they manage a lot of buildings, and they don’t realize you don’t need five building engineers on a building, you can operate it efficiently with one or two. So those are just some examples of aspects that we look at.
Greg Owens 8:26
Right, right. Yeah. Katrina note that we need to like, look at getting our building to zero.
Katrina (Hayes) Stephenson 8:34
Yeah, here Oh, yeah. Well, we have just done the virtual so we’re taking baby steps.
Greg Owens 8:40
Oh, yeah. Totally, totally. And what is been so you know, we were talking about 2020. And for you and what you got what you do out there, what has been the biggest challenge that you had to sort of face in that sort of year?
Heidi Duffy 8:55
Oh, where do I start? You know, one of the biggest challenges I think that hits me is looking back almost a year ago, right, we all got hit, I think it was March 9 717. So almost a month away, I think it was the biggest challenge was how quickly we had to adapt to our tenants in our buildings to make everyone you know, we had the initial shelter in place. But in a medical office building, that doesn’t apply, it’s essential. So you have to quickly figure out how to get your tenants comfortable with coming to that building every day to operate to see patients so it was having to quickly look at each medical office building and understand where we needed to improve. I mean, vendors weren’t even our h back vendors, our janitorial they weren’t even up to speed. So for them to even advise on what needed to happen. There was a lag time there. And I think you know, We were the broken record of the last year. But we’re all in this together. And so I think there was a lot of understanding from our tenants to be patient with us as a landlord. But that was a big challenge. Where do you want what was worth spending your money? You know, is it worth spending $10,000 on your elevator to put this special, we did do it on a few of our buildings, but a recall system where that elevator would only touch two floors at a time before it was recalled back down to your ground floor. So it would only allow so many tenants with people within an elevator, right? So having to decide where we’re going to efficiently spend to make our building Safe, safe environment for our tenants, you know, a lot of you get a lot of outside noise on we’ll just close your building down. It’s like, well, we heard the lease, we have leases with these tenants, you can’t just do that. So that’s the biggest challenge that quickly comes to mind. And I think secondly, it’s the world of purchasing assets, right and not knowing what direction folks are going in. Are they going to be occupying buildings? How is this work from home going to affect our business line? And I can’t speak too much there because I’m going to make my acquisition team sweat a little bit. But we’re still figuring that out. Right? Yeah. It’s it’s just a different world we’re living in right now.
Greg Owens 11:28
There’s still so much uncertainty even though it feels it’s everything’s feeling better here now in February, right? Like, almost like you said, A year later, we’ve learned so much, right? I don’t think people are needing to disinfect things quite as much. You know, not cleaning everything with bleach. At least I don’t smell that. I don’t smell that anymore. Right. Your skin
Heidi Duffy 11:49
burning off because the writer loves and like base things on at the grocery store.
Greg Owens 11:55
Yeah. And then vaccinations are way up. I mean, I just ran into another person. I know that just got both vaccinations. Right. Right. And she’s a teacher, and she’s a teacher. And I was like, oh, man, that’s great. that’s gotten done the teachers.
Heidi Duffy 12:07
Great. Yeah. There’s some comfort behind the numbers being reduced.
Greg Owens 12:13
Yeah. And so what do you guys like when you look at the future? Here? What is it that you’re seeing? Like, do you see any opportunities in buildings, buying buildings and that kind of thing? I just saw for the residential market, that there’s half the number of housing that it should be right now. That is for sale? Half, right, like, higher country? I’ll send you the article after this. But it’s, it’s a great article, because it’s like, oh, wow, that’s why prices are also way up in housing, because the inventory is super low. What are you seeing on the commercial side? As far as these assets go?