Flagship Healthcare Properties (Flagship) acquired and will repurpose a 
Class A office building into a healthcare destination center for providers in Wilmington, North Carolina. Flagship paid $21 million for the three-story, 153,526-square-foot property at 3601 Converse Road that was purpose-built as a single-tenant office building formerly occupied by a Verizon call center.

Flagship is on its way to repositioning this property as an outpatient healthcare campus, and has 
already received lease commitments from Novant Health, whose tenancy in the building 
will begin in 2025 with services that will eventually occupy two floors of the building in 
the newly branded Flagship Medical Plaza. 

The former Verizon building will house various services, including an OB/GYN clinic. It will also house specialists in pulmonary medicine and pain management along with endocrinology and rheumatology – two specialties for which it can be difficult to recruit providers. The building will also house other lab services, including radiology, pharmacy and some infusion chairs.

Skender broke ground recently on a new 75,000-square-foot outpatient center for Ann & Robert H. Lurie Children’s Hospital of Chicago. Lurie Children’s Outpatient, Primary Care and Infusion Center will be located at 1895 Arbor Glen Blvd, Schaumburg, Illinois.

The project team includes HKS as the architect, Skender as the general contractor, IMEG Corp. as the structural and mechanical engineers, and V3 Companies as the civil engineers.

The new outpatient center will expand Lurie Children’s footprint in the northwest suburbs and serve as a replacement for the smaller locations at Arlington Heights, Hoffman Estates and Huntley. The project includes 40 exam and treatment rooms, and is expected to be completed in the summer of 2025.

“The opportunity to bring critical healthcare services to the youngest and most vulnerable patients makes us extremely proud,” said Brian Kane, vice president at Skender. “It’s another example of how healthcare that is closer to home can change lives.”

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The medical office market in the Tri-State New York metro area, encompassing NYC, NJ, CT, and Long Island, displays diversity, with strong demand and unique structural characteristics in each locality, according to JLL’s TriState medical office report. 

In Manhattan, medical offices are typically situated within mixed-use buildings, offering convenience in the bustling urban landscape. Conversely, the Outer Boroughs feature a combination of spaces in mixed-use and standalone buildings, primarily in less densely populated neighborhoods. Manhattan commands higher rents due to its central location and density, while less dense areas provide more affordable alternatives. 

Furthermore, with individuals over the age of 55 constituting 30% of the U.S. population and the elderly population aged 80 and above expected to grow by 50% within the decade, there is a projected significant increase in demand for outpatient healthcare services. In the Tri-State area alone, outpatient demand is anticipated to grow by 6-10% over the next five years across much of the region. 

Altera Fund Advisors and Virtus Real Estate Capital acquired a four-property medical outpatient portfolio in Tucson from Healthcare Trust of America for $43.23 million ($201 PSF). The joint venture engaged Newmark to arrange financing for the deal.

The portfolio’s four assets are situated on or adjacent to hospital campuses in the Tucson market. The portfolio totals 215,571 rentable square feet in aggregate and was approximately 73 percent leased at closing.

The properties include:

• Desert Life Medical Plaza for $5.2 million.
• La Cholla Medical Center sold for $11.25 million.
• Gateway Medical Plaza sold for $23.43 million.
• Academy Medical Center sold for $3.35 million.

The first three are near Northwest Hospital, and the fourth, St. Joseph’s.

This is not Virtus Real Estate Capital’s first medical office acquisition in Arizona. Earlier this year, the company purchased Banner Health Center Plus, a 70,000-square-foot property built in 2021 in Phoenix, for $48.5 million.