The CHI St. Vincent Little Rock Diagnostic Clinic medical office building and ambulatory surgery center is located in the desirable West Little Rock market adjacent to CHI St. Vincent Heart Clinic – Kanis, on the campus of Baptist Health Medical Center. The Little Rock Diagnostic Clinic (“LRDC”) practice was formed almost 60 years ago and has grown to be the largest private, multi-specialty practice in the State of Arkansas. St. Vincent Health System owns the LRDC practice which employs over 30 physicians in the fields of Internal Medicine, Endocrinology, Neurology, Gastroenterology, Podiatry, Pulmonology, and Rheumatology. The ± 96,692 square foot facility is 100% leased to St. Vincent Medical Group and guaranteed by St. Vincent Health System, which is owned by Catholic Health Initiatives.

The acquisition was structured as an UPREIT transaction whereby a majority of the LDRC physician owners exchanged all or a portion of their proceeds from the property sale for Flagship REIT shares, thus converting their ownership of a single healthcare real estate asset into a diversified portfolio of outpatient healthcare facilities. Structuring the acquisition in this way also allowed the selling physicians to defer capital gains taxes. Another benefit of the UPREIT for the physician owners is they were able to relieve themselves of asset and property management responsibilities. Even with a third-party management firm, the CAPEX demands and maintenance needs were quickly adding up due to the age of the facility.