Heidi Duffy 12:51
Yeah, I mean, great question. It’s, there’s an opportunity in every bad situation. And unfortunately, and, you know, I don’t know whether it’s a recession or the economy changing there, there could be huge opportunities. So yeah, you know, with interest rates going down, some of these buildings that perhaps vacancy is going down, we’re going to see a lower purchase price where sellers are getting more aggressive, perhaps they want to dispose of some of these assets, because they are uncertain on what’s going to happen. If you have, if you have a mom and pop owner that has 10 tenants that aren’t necessarily credit worthy, you might want to get rid of that building, right? Just because things are so uncertain. So yeah, there’s a huge opportunity for us to pick up assets right now. And it is part of our strategy. We have no indication right now that we’re slowing down, you have huge capital spending plans for 2021 going into 2022. And there hasn’t been any reason for us to back off our plan. So that’s very reassuring for the whole company and keeps our jobs in place and hopefully just expands our portfolio. And and yeah, I think they’re outside in the obvious opportunity of purchasing more buildings. I think there’s just an opportunity to be in front of clients that we would build specifically for right these medical users. I think a lot of our even though we’re not able to meet in person, and this is how we have to communicate, I think there are a lot of people are putting their guard down, I think and just becoming more resourceful, and then reaching out and just getting a little more creative. So on the medical side, we’re hoping to tap into that where we can get in front of more medical users and, you know, showcase who Meridian is, which is, you know, delivering assets quickly and under budget, right. So how we can deliver to our clients I think is going to change. We haven’t quite figured out how But yeah, I think to your question of it opportunity. I think there’s huge opportunity right now
Greg Owens 15:03
that I think you’re so right on with, especially in industries that you guys are focusing on the medical industry, and biotech touques. We’ve talked to a couple of people inside biotech. And it’s amazing how much they’re going gangbusters at this time, right? Last day.
Heidi Duffy 15:19
Yeah, left and right. They’re picking up especially like in South San Francisco. And yeah, it’s there. Yeah. Left and Right, you just see another article out that that there’s been a new acquisition, and,
Greg Owens 15:32
yeah, unbelievable amount of money being spent into that industry. And you’re right, it’s like sort of that whole sort of South of Market or kind of basin area like that development that’s happened. With all the money that’s gone in there. It’s been unbelievable to see.
Heidi Duffy 15:45
Yeah. And it’s even though things are concerning, it’s I think, you know, I think we will go back close to hopefully what we were before and, you know, people are going to need their office to collaborate, and we are going to need this infrastructure. It’s funny, right? pre COVID, good luck going into Oakland, or San Francisco and finding any lands, right. There’s no land to build on. That’s why we really have had to get creative with this value add line. And okay, let’s look at the old brick building on the corner in downtown Oakland that looks like it’s falling apart. But how can we repurpose that into a general office building or medical office building, and reuse it and it just on our resources on Earth, it helps to reduce that. So it’s pretty cool to see, but I think there’s huge opportunities right now, we’re tapping into that.
Greg Owens 16:36
Yeah, I love that. And I love the creativity that you have to come up with, especially in some of those old buildings is you have to work within that old building framework, right? Especially if it’s an Oracle building and, and, and having that eye for, like, wow, we can make this old, like a manufacturing company, you know, like building into medical offices, right? And keep some of the old and bring in some all the new technology that a new building and new tenants really desire. Mm hmm.
Heidi Duffy 17:08
I wish I could show you you photos. And we actually did. This was a few years ago, pretty creative development in Santa fell, we developed a dialysis center. And in order to meet our parking, it actually wasn’t all more in
Greg Owens 17:22
orange. Which which built What’s the address?
Heidi Duffy 17:25
Oh, gosh, I knew you’re gonna ask me that. Like five years, four or five, four years ago, so I don’t
Greg Owens 17:32
know merit Miracle Mile and center fell?
Heidi Duffy 17:35
No, that’s not ringing a bell. I was gonna see if I could pull up the address like 1415. I actually, well, if you go on our website, our website actually just went under some reconstruction with some pretty cool updates. But Katrina,
Greg Owens 17:51
Katrina knows this about me. I’ve lived here in Marin County for 32 years now. And so and I work here, my office is in center fell. And I pretty much know like every building, and I think I know which building you’re talking about. So
Heidi Duffy 18:06
also to like, right when I feel like you don’t know it. He knows it. Like almost Oh, yeah, I’ve been there. Oh, yeah. That’s right. That’s right. thought the address was right. I want to speak incorrectly. It’s 14 15/3 Street. And
Greg Owens 18:19
that’s the one I was thinking. That’s awesome. That was your project. Yeah.
Heidi Duffy 18:24
If you ever if you drive by it recently, on the side street, we had to purchase the big old Victorian building right next door to our parking count. So we had to do a lot line adjustment and just slightly increase the size of the lot for the dialysis center. But we purchased this beautiful Victorian home that we put probably way too much money in, you know, had to completely re I think we had to put it up on Jack’s and Rees
Greg Owens 18:54
know the property. Yeah, yeah, that’s, that’s the one that took a while to get it done too. long, complicated, because that’s a historical home. And so you had to save the home. And I love that I love I didn’t realize you guys weren’t that small with properties too.
Heidi Duffy 19:10
Well, I guess that’s the creative side of Meridian. We don’t that was the first time we had to purchase a residential home. And then someone on the team said, Well, why don’t we renovate it and resell it. So
Greg Owens 19:23
in the end, you move it over to gain the gain the parking that you needed for dialysis center, which is brilliant, right? And that takes a tremendous amount of capital to do all that. But I’m sure the numbers probably worked out really well, because that really added a tremendous amount of value. Because I know San Rafael row, I own a building in Centerville, okay, and we have no parking. Yeah, it’s constant. It’s a constant problem, right? And I’m constantly trying to figure out which neighbor I can buy in order to gain some more parking spaces so we can expand for sure
Heidi Duffy 19:55
money can buy anything, right,
Greg Owens 19:57
right, right. Right, right. We need to talk into some of your That’s great to hear that you guys go. I mean, what is the size range of buildings that you do is that sort of on the lower smaller side of things, then
Heidi Duffy 20:11
that is we actually just closed escrow, which would be our largest asset today in Tucson. 230,000 square feet 230,000 square foot medical office building that we are adding value to. So it actually was an existing hospital that hasn’t operated as a hospital in about 15 years. So we have, we will hopefully have some good ghost stories on that one. But we Yeah, we’re gonna there’s some Lisa, we’re gonna be putting about $7 million of capital work into that project. So it kind of ranges anywhere from 10,000 square feet. I mean, we want to we want to go larger, so we’re out hunting for those larger buildings.
Greg Owens 20:54
Absolutely. What and what markets you mentioned Tucson, you mentioned Texas, what markets are you seeing the most? Because I find it as an investor here in Marin County per se, right. Like, it’s so hard to find things that seem like it’d be worth to invest that money and to get the return in a short enough period of time. Where do you see anything out there like Tucson or other areas that are, are more what economically Make sense?heiWe do and that’s, that’s I will answer the best I can because my acquisition team, they spend a lot of time researching all the markets, we have actually a very in depth process for researching markets and clear reading on where we can purchase assets, purchase existing assets and develop if it’s on like the value add side for like Tucson and Tucson is booming right now. Arizona in general is booming. So yeah, yeah, we’ve seen a lot of activity. It was ironic we closed escrow on this building in Tucson in December. And then two weeks after that we just kept seeing these large national wreaths were purchasing in Tucson. So that that was reassuring. But yeah, I mean, there’s to generally answer your question a lot of time and energy into specific markets that we can get approval to purchase in. Now if it’s if we have a tenant Intel will go wherever our tenant wants us to. So
Heidi Duffy 22:21
Oh, right. But we’re signing a lease with a tenant and they want us to build a 50,000 square foot building in the middle of nowhere. We’re going to build it.
Greg Owens 22:30
So if Tesla comes to you, and they’re like, Hey, you want to build in sparks, you’re like, Sure,
Heidi Duffy 22:36
sure. Yeah, we’ll take that. So really, on the value add side, a lot goes into that researching where rents are trending absorption with vacancy. I won’t bore you with all of that detail. But it’s I can tell you it’s our acquisition team tirelessly works on that.
Greg Owens 22:54
I’ve been I’ve been looking any any ideas about Reno?
Heidi Duffy 22:58
Oh, gosh, no, no. What are you looking to purchase in Reno,
Greg Owens 23:03
I keep having in the back of my mind to get another commercial property and buying something because I know housing is just too much. And I was looking at like smaller units to be in the smaller under 10,000 square foot. And so Laurie?
Heidi Duffy 23:15
Oh, gosh, I don’t know if we’ve researched. I’m sure someone on our acquisition team has.
Greg Owens 23:20
I bet Yeah, Reno has been changing a lot, right, especially with Tesla moving into up there and building their Giga factory there. It’s definitely changing the landscape. And, and I think there’s more investment money coming in. It’s pretty amazing.
Heidi Duffy 23:33
Yeah, good luck.
Greg Owens 23:37
We’ll see he was and what are you seeing from your tenants? Like what cuz I, we’ve talked to a lot of high tech companies. And you know, like, when we talked to Facebook or Google, they’re not even having their employees come back to buildings until I think now they’re pushing it even back again, right to like, even before it was September of 2021. And I think it’s like, for some of the companies are like, Oh, no, you can work from home indefinitely. Right. What are you seeing? And I know that the health industry is much different, right. And so in the layout of buildings or anything like that, that you’re seeing any sort of trends looking forward in this sort of, you know, end we’re not ending COVID but, you know, yeah, just the foreseeable future.
Heidi Duffy 24:20
Yeah, no, I mean, we, I think, like you mentioned in the general office, we’re all that’s where everyone else has kind of been majority of tenants working from home. The good news is a lot of our tenants have a plan to phase back in over summer of 21 and fall of 21. We have a building in San Mateo 1300 El Camino Real that we purchased. We’ve owned it now for about a year and a half. I mean, our lease up has been extraordinary, signed some pretty large leases during COVID. So even though these tenants aren’t occupying the space, we’re building them out and they plan to occupy later This year. So I would say for kind of the larger tenants like whether it’s Facebook or any of our larger tenants, they do plan to come back, I think it’s more so the smaller companies, maybe the mom and pop that really that paying that rent is a burden on them. And if they’re not utilizing the space, I think that’s where you kind of see a lot of shuffling around of tenants, those tenants moving out of buildings looking for a smaller, cheaper space that they can operate more efficiently in. So I think kind of my idea is that for smaller companies, we’ll see a big change. I think companies are going to be more open to allowing their employees to work for home. And once you get into the corporate, you know, the corporate, larger tenants, I think, their employees that you know, and I know I missed being back, I thought I always thought working from home full time was a glorious thing. And now I’m like, get me out of the house.
Greg Owens 25:57
Katrina, Katrina, Katrina has been that way the whole time. We’ve allowed her her to go back to the office, because she was like, I don’t like being home. I want to be at the office getting work. Yeah,
Heidi Duffy 26:06
at least a couple days a week. So yeah, super grateful. Yeah, I am. We’re very optimistic that tenants are going to stay and it’s, you know, the deals that we’ve been signing, it’s been proven that these tenants plan to come back to the buildings.
Greg Owens 26:22
Right, right. And part of this podcast, I love talking about your sort of origin story of how you got into doing this, because I think there’s a lot of there’s so many careers out there in the world that young people don’t know even exist. And and sometimes people find them, they stumble into them, and they find it. They’re like, Oh my gosh, this is an amazing career. Right now I didn’t even know is here. And so and other times maybe they had family or something like that. What was your What led you to this place in time in this industry?
Heidi Duffy 26:52
Yeah, that’s a great question. I kind of have an interesting projection of my career. I was right out of college from Cal State East Bay studied business, I really had no clue what I wanted to do, I, I thought I was going to major in something in the health care world and become a nutritionist or a, I looked actually I found my business plan for when I was in college. And I wanted to be a physical therapist for professional sports, that I get to travel with the team so that that didn’t happen. But I am I actually had a close friends that worked with Meridian and kind of introduced me to the development world, I knew nothing about it. I hung in and showed me a few pictures and said, We build buildings. And that was all I knew. And they brought me on Meridian. I’ve been with Meridian almost eight years now in June, eight years, and I started out as their office manager, and office manager marketing. I pretty quickly, I had no clue where I wanted to start out of college. It was it was a job. It was a you know, it was I don’t want to say just a paycheck, but it was, you know, right out of college loans to pay. So I started as office manager and I pretty quickly I would say within six months to a year realize that was not my that was not my area of expertise. I I wasn’t very fond of it. I’m a people person. And I’m a people pleaser. I like taking care of issues and you know, getting the result and seeing people happy. So I Meridian has been amazing. They’ve mentored me, they kind of slowly put me into, hey, we have a couple buildings, we need to sell Do you want to help out because they just lost? You know, we were very small company at the time. And like y’all help out and it just kind of slowly like, Hey, we need you to property manage this building that we’re going to sell in a year. So I was able to start to get my toes and to the property management, escrow process. And then now being you know, moving up into asset management, I get to manage capital projects, I get to manage $7 million capital projects work with architects. So my creative side of Designing Spaces and working with architects is super fun. So I think, you know, I like you said, a lot of college students don’t know what jobs are out there. And they might just think a lot of people think asset management is property management or it’s just doesn’t sound fun, but I’m like no, you get I get to go to Santa Fallon look at this super cool building that I got to help design right and or work with tenants to put together a $20 million lease and build out their space and watch them move in. So I that’s been how my career has kind of slowly progressed and and I love it. I get to travel I get to get on plane Not right now because COVID but I get to get on planes and travel and have business lunches and meet with my vendors go to conferences. I do think it’s about the company that you work for. Yeah, I think we’ve been very fortunate on a company that allows me to put myself out there and go to networking events be involved, whatever process of the acquisition to owning it to selling it. I get to be part of all of that. So I think there’s a big sense of ownership, which I think is Yeah, it sounds
Greg Owens 30:17
like you have a lot of autonomy within the in the role, which sounds really you sounds great. And then that peace around creativity around you know, you get to the end, you get to do diversify different projects and different things. You’re looking at a gala dialysis center one day, and then you’re looking at like, a hospital another day, right? Which, which is incredibly, so much fun. It’s mean, it’s what I love doing right? I love I love seeing buildings, and I love being part of that creativity process. I mean, we’re on the painting end of it, you know, making that making those change paintings the
Heidi Duffy 30:50
best because it’s like instant gratification. Instant gratification.
Greg Owens 30:53
Yeah, it’s the fastest, easiest and cheapest thing. upgrade a building. Right?
Heidi Duffy 30:59
I always put good paint in our budget. How good is the line? So
Greg Owens 31:04
that’s great. So as we wrap up, what would you say to somebody that wanted to get into this or look into it? How would you say to go about doing that? You know, like what kind of resources or what kind of learning and things like that that they would need to do?
Heidi Duffy 31:19
Yeah, I mean, I would say jump into the various organizations out there. If you’re not already with a company and you’re looking to find a company or just connect with colleagues. I’m very active with Boma. Alright, so whether it’s Boma crew, I mean, there’s a ton of networks out there, but Boma has been huge for myself in kind of as my career grows. But yeah, so just getting involved with conferences and really just trying to learn the various aspects of development and where you want to go with it. I think if you want to crunch numbers and sit behind the computer all day, you can do that. Right? If you want to be an underwriter and acquisition, that’s in terms of schooling, what you want to do to prepare for that you’re going to get your finance courses, right. But if you’re more so like on my role with whether it’s property management or the designing, I think there’s a lot of property management courses, facility management, just start to start jumping into some of those just so you can see what you’re getting into. But yeah, I think there’s a lot of amazing companies out there right now. And so just put yourself out there on LinkedIn also, just oh, great marketing, marketing yourself.
Greg Owens 32:30
That’s great. And if people wanted to reach out to you, is LinkedIn the best place to do that?
Heidi Duffy 32:35
It is Yeah.
Greg Owens 32:36
Okay, that sounds good. That sounds good. Well, thank you so much for being on our podcast. Heidi. It’s been a pleasure talking to you and learning more about Meridian and the types of things you guys get into
Heidi Duffy 32:47
you as well. Great. Thank you. And hopefully we can do it in person lunch.
Greg Owens 32:50
Yeah, lunch or something like that. Like we get on to Walnut Creek and out that way often. So yeah, at some point when this opens up more, for sure.
Heidi Duffy 32:59
That’d be great. Thank you so much for your time. Great. Yeah, thank you.
Outro 33:14
Thanks for listening to the Watching Paint Dry podcast. We’ll see you again next time and be sure to click subscribe to get future episodes.