Norfolk, Virginia 99,236 SF
SUMMARY
In June 2016 Flagship Healthcare Properties, in conjunction with its joint venture partner, USAA Real Estate Company acquired DePaul Medical Plaza, a 99,236 square foot, LEED Silver certified, Class A medical office building located on the campus of Bon Secours DePaul Medical Center, north of downtown Norfolk, VA. The building, developed in 2014, was Flagship’s first acquisition in the Hampton Roads region and strengthened our relationship with Bon Secours Health System, one of the leading Catholic healthcare providers in the Southeast. The acquisition represented our 10th transaction for our partnership venture with USAA Real Estate Company.
CHALLENGES
- For a two-year old building, its leasing pace was behind schedule, despite its proximity to the hospital’s front door and its superior quality and finishes over competing facilities.
- The seller identified additional lease prospects and required recognition of value for their tenancy, but struggled to secure them with lease commitments leading into our purchase and sale negotiations, creating a moving target right through to the closing date.
SOLUTIONS
- Flagship is employing an aggressive leasing strategy in conjunction with the local brokerage community to increase occupancy by identifying and signing tenants that complement DePaul Medical Center’s care delivery strategy. We also employ an enhanced property management and tenant relations strategy to improve the tenant and patient experience.
- Flagship Healthcare Properties negotiated a rent support agreement with the seller with burn-off provisions as permanent tenants were secured and leases signed.