A private real estate investment trust managed by a North Carolina company specializing in health care properties has acquired the Little Rock Diagnostic Clinic building, home to the largest medical specialty practice in central Arkansas, in a $34.8 million transaction that closed last week.
The 96,692-square-foot medical office building at 10001 Lile Drive, part of the Baptist Medical Health Center campus in west Little Rock, was seen as an investment opportunity.
The building is under a 10-year lease signed late last year to CHI St. Vincent Medical Group, according to the trust manager, Flagship Healthcare Properties of Charlotte, N.C., and Colliers International/Arkansas, which represented the seller.
Flagship also said the lease is guaranteed by St. Vincent Health System, which is owned by Catholic Health Initiatives, the third-largest nonprofit health system in the nation.
"We are honored to have been chosen by the physician partners of Little Rock Diagnostic Clinic for our first acquisition in the Little Rock market," said Gerald Quattlebaum, senior vice president of acquisitions at Flagship. "It was a pleasure working with the leadership at LRDC, and the entire Flagship team looks forward to supporting their continued growth and success as their real estate partners."
Quattlebaum's company manages more than 3.9 million square feet of health care real estate on more than 150 properties serving more than 460 tenants. Flagship has developed or acquired over 75 properties valued at more than $600 million, according to the company website.
Flagship started its private real estate investment trust last year. It holds interest in more than 40 health care properties valued at more than $350 million.
Flagship's most recent acquisition was announced in May: a $26.3 million deal to acquire a six-building medical office portfolio near Charlotte from CFM Real Estate Development, according to Commercial Property Executive.
The three-story Little Rock Diagnostic Clinic building was built in 1977 on nearly 10 acres and has undergone at least three expansions and other improvements. It is appraised at nearly $11.3 million, according to online real estate records maintained by the Pulaski County assessor's office.
The seller was LRDC Real Estate LLC.
"After extensive diligence and deliberation LRDC Real Estate LLC has decided to partner with Flagship Healthcare Properties," said Dr. Nutan Bhaskar, the limited liability company's vice president."The physician partners of LRDC Real Estate LLC have the utmost confidence in the management team of Flagship Healthcare."
Todd Rice, executive vice president and a principal at Colliers International/Arkansas, represented LRDC Real Estate in the transaction.
"The property's location and single-tenant occupancy make it a sound investment for the buyer," he said in a news release.
The buyer was represented by Orion Capital Partners, a Little Rock company specializing in health care real estate space.
The deal is the latest in a litany of changes in the past year tied to the Little Rock Diagnostic Clinic, which was established in 1961.
The changes began in June 2018 when seven physicians at the clinic left to form their own practice, Premier Gastroenterology Associates.
Last September, Premier purchased the Rodney Parham Shopping Center at 10901 N. Rodney Parham Road, formerly home to a Kmart, for $12 million with plans to develop the 16-acre site into a medical complex. The physicians group is investing up to another $26 million to develop it as the Premier Medical Plaza. It is scheduled to open by year's end.
Also in September 2018, the remaining physicians at the Little Rock Diagnostic Clinic joined CHI St. Vincent Medical Group, a network of primary and specialty clinics spanning much of central and southwest Arkansas.
Business on 07/02/2019