CHARLOTTE, N.C. —AEW Capital Management L.P. (AEW) and Flagship Healthcare Trust (Flagship REIT), a Charlotte-based healthcare real estate investment trust, are pleased to announce the formation of a joint venture and subsequent acquisition of eight ambulatory surgery centers (ASCs) across seven states in a series of successive transactions.
This portfolio of ASCs includes 145,561 square feet of ASC space and related medical office across seven states, including Texas, Arizona, Michigan, Illinois, Missouri, Tennessee and Florida. The portfolio features long-term leases to high quality providers and partnerships with national surgery center operators and health systems. 75% of the ASCs are in top 40 metropolitan statistical areas and affiliated with a top five national surgery center operator and/or health system.
“With AEW’s experience in the healthcare real estate sector, we believe our strategic partnership will significantly increase our reach and capacity to deliver ASC real estate solutions to physician groups, operators, and health systems,” said Flagship Healthcare Properties (Flagship) CEO J. Brannen Edge III. “We are excited to work with AEW who shares our commitment to strengthen our client relationships in the ASC sector and to focus on delivering value to all parties involved, investors, sellers and tenants alike. The acquisition of the first eight assets creates a strong foundation for our joint venture.”
“We are excited to be partnering with Flagship in this strategic joint venture. Flagship’s knowledge, expertise and deep relationships within the ASC sector will allow for continued growth in the space and access to national surgery center operators and healthcare systems,” said AEW’s Vice President of Healthcare and Senior Housing Scott Corbin. “Partnering with a best-in-class operator like Flagship gives us confidence to execute on this ASC strategy through any economic cycle. We have constructed a high-quality portfolio and look forward to continuing to add high caliber assets to the venture.”
While Flagship REIT is focused on clinical outpatient real estate in the Southeast and Southern Mid-Atlantic regions of the United States, it recognized an opportunity to build upon strategic partnerships with leading provider groups and ASC operators across the country with this strategic joint venture. With Flagship’s internal ASC expertise and services tailored for the unique needs of ASC facilities and operators, including facility life safety and compliance services, this focused joint venture plans to continue to grow the portfolio across the country through strategic acquisitions with a focus on long-term leased, operationally high performing and single tenant ambulatory surgery centers.
“We are extremely excited about the quality of these assets, the markets where they are located, and the strength of the providers operating within them. Ambulatory surgery centers are at the forefront of transformation in health care delivery, and as experienced investors in this sector, our relationships and understanding of the needs of these ASC tenants will continue to help us provide attractive ownership for their mission critical real estate,” said Flagship’s Executive Vice President of its ASC platform Blake Bratcher. “We plan to continue capitalizing on new acquisition opportunities in alignment with leading physician groups, surgery center operators, and health systems so they can carry out their mission more effectively.”
Flagship will provide property management and asset management services for the portfolio. These properties were financed by Fifth Third Bank, led by Executive Director Michael Perillo. Fifth Third acts as lead arranger and administrative agent on this senior secured credit facility for Flagship REIT and AEW.