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.
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.
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.
Lange Eye Institute Medical Office Building
The Villages, Florida
The Lange Eye Institute is a 21,384 square foot medical and professional office building located in The Villages, Florida. The Institute’s prominent location within the surprisingly active retirement community attracts a variety of medical and professional tenants. The Lange Eye Institute is owned fee-simple which is a rarity in the master-planned community of The Villages.
The building was previously owned by an owner-occupant and extensive deferred maintenance was uncovered during the due diligence process.
The Brackett Flagship Properties team worked diligently before the acquisition to identify and reserve for all necessary capital expenditures at the property. Immediately after closing, BFP began to repair and renovate the building, maintaining compliance with both the local authority and ensuring that the building remains an attractive asset for years to come.
9550 Rocky River Road
Harrisburg, North Carolina
Completed in 2013, 9550 Rocky River Road is a 14,000 RSF two-story multi-tenant medical office building in Harrisburg, North Carolina. The property is phase I of a III phase medical office park on a 4.134 acres of land, which is adjacent to a newly constructed free-standing emergency department operated by Carolinas Healthcare System.
The project involved meeting NCDOT and local municipality demands regarding road improvements and site accessibility.
The Brackett Flagship Properties team worked closely with the NCDOT, the town of Harrisburg, and adjacent property owners to negotiate a shared driveway and shared maintenance agreement. These efforts produced an ideal entrance for the property, satisfying the NCDOT and allowing for more buildable area on the property.
Brackett Flagship Properties delivered the project under budget, saving the ownership entity 6% of the total project cost.
Matthews and Charlotte, North Carolina
Brackett Flagship Properties was engaged by OrthoCarolina in 2011 for the management of 710 Park Center Drive upon their acquisition of the Matthews, NC property. In 2014, OrthoCarolina expanded their relationship with BFP to include management of 9848 N. Tryon Street, a property owned and operated by OrthoCarolina in Charlotte, NC’s University Area. OrthoCarolina’s building use includes an orthopaedic practice, physical therapy, a mobile MRI unit, an after-hours Urgent Care, and a joint-venture Novant Ambulatory Surgery Center (ASC) in Matthews. The University Area location houses an orthopaedic practice, an urgent care, and an ASC owned and operated by OrthoCarolina.
BFP handles all property management, maintenance, accounting, and lease administration services for both assets. BFP was also retained on an ongoing basis to handle the regulatory facility compliance oversight and maintenance for the ASC accreditations.
Management of buildings with Urgent Care and ASC’s has a critical nature, timely responsiveness and issue resolution is imperative to facilities serving these functions.
Continued education and expertise on the regulatory facility compliance requirements for ASC’s is essential in order to successfully execute facilities maintenance and provide the appropriate documentation in accordance with the accreditation requirements.
To manage the critical nature of these facilities, BFP provides knowledgeable, qualified personnel and leverages established vendor partnerships to provide the level of service expected by the client.
BFP’s property management and engineering teams are well-informed and up-to-date on ASC regulatory compliance requirements. Fully understanding these requirements allows us to manage facilities with a proactive approach to maintaining compliance.
CaroMont Professional Office Building
Gastonia, North Carolina
In 2015 The Flagship team was selected by CaroMont Health to provide space planning, development and construction management services for a new professional office building. The project is planned for the corner of New Hope Road and Court Drive near CaroMont Regional Medical Center. The ±48,000 SF, 2-story facility will be owned by CaroMont Health and 100% occupied by various corporate operations including Finance, Human Resources, and Public Affairs. The building was completed in August of 2017.
The project involved a complex conditional site plan amendment process and the addition of a new signalized intersection.
Flagship Healthcare Properties needed to free up valuable space on the hospital campus for more clinical expansion by bringing multiple departments under one roof in a much more efficient work environment.
Flagship Healthcare Properties was charged with researching, recommending and implementing general office upfit standards for the hospital system and “right size” the new building based on future operations and growth expectations.
Flagship Healthcare Properties managed the land purchase and entitlement process for CaroMont, including negotiations of a complex set of declarations with the seller and neighboring land owners as well as working through a conditional site plan amendment process with the local planning authority.
We successfully assessed more than 10 separate departments in multiple locations on and off the hospital campus to understand each group’s optimal use of space, growth expectations, and interdepartmental synergies. The result was to design a flexible office environment with low operational costs that would improve the employee work environment and satisfaction metrics.
“Brackett Flagship is a very well qualified office development company. However, what really sets them apart is their depth of healthcare knowledge and awareness of sensitivities unique to planning for, and implementing change within the healthcare/hospital culture.” Lee Nester, Director of Property Management for CaroMont Health
RiverCrest Medical Park
Granite Falls, North Carolina
Since 2013 beginning with the Laurel Park Medical Office Building, Flagship Healthcare Properties has engaged with Caldwell UNC Health Care as a strategic real estate advisor and development partner, and has become a key partner in assisting the Hospital with evaluating and executing on various growth opportunities. In 2014 FHP entered into a development agreement with Caldwell UNC for the phased development of a new satellite campus in Granite Falls, NC. The 6+ acre property will ultimately include roughly 60,000 SF of medical office space anchored by a 20,000 SF surgery center. The first phase, a 25,000 SF medical office building will be anchored by Caldwell UNC Health Care and come online in 2nd quarter of 2017.
Identify a site in southern Caldwell County ideal for the new satellite campus to include outpatient offices and an ambulatory surgery center.
FHP provides capital funding, allowing the hospital to preserve capital and avoid real estate ownership at their preference. Here, FHP was able to structure a multi-parcel ground lease arrangement that allows the hospital to keep long term control of the strategic location while FHP develops, owns and manages new Caldwell UNC Health Care leased buildings.
Provide real estate advisory and support services throughout the hospital’s Certificate of Need process to relocate two operating rooms and one procedure room.
Manage various land entitlement processes including negotiating a declarations agreement with adjacent owners, municipal presentations and conditional site plan approvals.
Flagship Healthcare Properties has successfully assisted Caldwell UNC Health Care with their strategic initiative to enhance market share while contributing to the quality of care in the community.
Flagship Healthcare Properties has worked on behalf of Caldwell UNC Health Care to identify, contract and purchase land for the Hospital to expand into two new territories within their market.
FHP has laid the framework, created a financial plan, and acquired the entitlements for Caldwell UNC to grow their new satellite campus over the next several years.
Swain Medical Park
Bryson City, North Carolina
In late 2013, Flagship Healthcare Real Estate Fund acquired Swain Medical Park, an 11,160 square foot medical office building. The property is located adjacent to Swain Medical Center in Bryson City, North Carolina and is 100% leased by Swain Community Hospital.
As capital allocation became increasingly important, the hospital was forced to prioritize various strategic initiatives, including repurposing space once occupied by a pharmacy for additional outpatient services.
Grasping the client’s longer term needs and goals, Brackett Flagship Properties proposed to restructure the lease and fund the renovations to repurpose the unused space to accommodate a new specialty practice.
The hospital’s capital was preserved for a host of planned patient-centric initiatives introduced when Duke LifePoint acquired the hospital shortly after Brackett Flagship Properties’ purchase of the property.
Central Piedmont Surgery Center
Asheboro, North Carolina
The Flagship Healthcare Real Estate Fund acquired this state-of-the-art, 7,341 square foot facility in December 2015. Central Piedmont Surgery Center, the building’s sole tenant, is a wholly owned operation of Randolph Hospital. The center has two operating rooms (ORs) and is equipped to handle procedures for general surgery, orthopedics, otolaryngology, urology, podiatry, ophthalmology and gynecology.
The surgery center was designed and built four years prior to acquisition.
The HVAC system was creating excessive humidity and was running inefficiently, thereby generating excessive energy bills and causing surgery cancellations and lost patient revenue.
During due diligence, Flagship observed the system and met with Randolph to better understand their issues.
Randolph waived its right to acquire the property, placing its trust and confidence in Flagship to help them address its issues.
Upon closing, Flagship’s property management team worked expeditiously with a team of engineers to identify, price and recommend a set of alternatives that would meet Randolph Hospital’s strict OR specifications and create a reliable and efficient operating environment.
Lee’s Hill Medical Plaza
In 2014 the Flagship Healthcare Real Estate Fund and its joint venture partner acquired Lee’s Hill Medical Plaza. The 72,098 square foot facility includes a freestanding emergency department operated by Mary Washington Healthcare, a two-hospital, 537-bed acute care system; a diagnostic imaging center; physician office space; and a Department of Veterans Affairs (VA) outpatient clinic.
The building was suffering from low occupancy (only 68% leased), a need for professional property management, and a comprehensive leasing strategy.
The relationship between the radiology group as both landlord and imaging center JV partner with the hospital was limiting the property’s leasing success and complicating the group’s relationship with its co-tenant, Mary Washington Healthcare.
Flagship Healthcare Properties rebranded the property and partnered with a local team to communicate the new ownership’s vision and approach to the market. In less than 12 months, we increased occupancy to 84% with the addition of complementary medical tenants.
Occupancy by the VA will supplement the hospital’s services, driving improved community awareness and higher patient volumes.
Carolina Orthopaedic & Sports Medicine
Gastonia, North Carolina
Brackett Flagship Properties was hired on a fee basis to complete this 29,000 square foot development project. Carolina Orthopaedic and Sports Medicine Center is a class A medical office facility representing the first of a 3-phase, 12-acre medical park near CaroMont Health’s main hospital campus. Occupied entirely by Carolina Orthopaedic and Sports Medicine Center, a premier orthopaedic practice, the building consists of exam rooms, administrative offices, classroom, digital X-ray services, physical therapy studio and a psychiatrist suite. Additionally, Brackett Flagship Properties was awarded the property management assignment at project completion.
Prior to BFP becoming involved, the initial project concept and design drawings resulted in a prohibitively high project development cost.
The project required a conditional use permit, potentially creating additional risk and project delays.
BFP conducted a thorough value engineering exercise, reducing project costs without sacrificing scope. Ownership realized total project cost savings in excess of 20%.
We managed the rezoning process including neighborhood meetings to mitigate resistance to the project.
We delivered the project on time and under budget, allowing Carolina Orthopaedic a smooth and predictable relocation from their former leased offices.
Harnett Health Medical Park
In 2014, Brackett Flagship Properties acquired Harnett Health Medical Park, an 18,623 square foot medical office building on the campus of Betsy Johnson Hospital, one of Harnett Health’s acute care facilities. The medical office building houses multiple practices to serve as the hospital’s primary outpatient facility, both for its permanent physicians as well as those who travel between Harnett’s other hospital locations.
Harnett desired a more significant partnership with the building owner, and one that has the capability to expand the facility as the hospital executes its future outpatient and recruitment strategies.
Harnett was undergoing transition in its governance and desired a landlord who understood the challenges of rural hospital systems.
Brackett Flagship Properties gained the trust of hospital administration by offering to implement property upgrades that enhanced the facility’s efficiency and, thus, improved care quality.
Harnett Health hired Cape Fear Valley Health System to manage the day-to-day operations of its hospitals. Through flexible and creative lease negotiations and changes to our accounting and reporting, we accommodated this important transition.
Laurel Park Medical Office Building
Lenoir, North Carolina
Flagship Healthcare Properties formed a joint venture relationship with Caldwell Memorial Hospital, part of UNC Heath Care, to complete the 15,000 square foot Laurel Park Medical Office Building. Laurel Park Women’s Health and Mulberry Pediatrics, two of Caldwell UNC Health Care’s outpatient practices, are located in the facility. Built on an urban infill site in downtown Lenoir, the property is situated less than half a mile from the main Caldwell UNC Health Care hospital campus.
The required building envelope and small site created design, development, construction and staging issues throughout the project period.
The Flagship Healthcare Properties team worked closely with city planning officials to reuse an infill site donated to the hospital and negotiated a shared parking agreement.
Both the building and parking were designed around an existing sculpture park on the property.
Flagship delivered the project under budget, saving the ownership entity 6% of the total project cost.