72,255-SF Class A building is anchored by the Mary Washington Healthcare System in Fredericksburg
Avison Young announced today that it has arranged the sale of a 72,255-square-foot, Class A medical office building in Fredericksburg, Va.
Lee’s Hill Medical Plaza, anchored by the Mary Washington Healthcare System & Radiologic Associates of Fredericksburg, has been purchased from the selling entity, a joint venture partnership between Flagship Healthcare Properties with Drake Real Estate Partners.
Flagship and Drake acquired the property in 2014 as a value-add opportunity and increased occupancy by over 20 percent, bringing it to 91 percent at the time of the sale. Tenant additions included the U.S. Department of Veterans Affairs and multiple expansions as well as the long-term lease extension of the hospital anchor tenant.
“The Drake/Flagship joint venture has proven to be a fruitful one. The successful lease-up of the asset has allowed us and our investors to achieve our financial goals, and also bring shared value to our tenants and the surrounding community by securing a long-term home for Mary Washington Healthcare in Fredericksburg,” said Jonathan Garonce of Drake Real Estate Partners.
“After successfully securing larger and longer commitments from existing building tenants, and introducing a few new ones, we are confident in transitioning this exceptional asset with a quality tenant base and stable return projections to new ownership,” said Ryan Dawson, Vice President – Asset Management with Flagship Healthcare Properties. “Its superb location, distinguished tenant roster, long term leases, and critical medical functions make it an accretive addition to an institutional portfolio.”
The Avison Young effort was led by Jim Kornick, Principal in the Washington, DC office; Mike Wilson, Principal in the Chicago office; Chip Ryan, Principal in the Washington, DC office; Erik Foster, Principal in the Chicago office; and Mark Johnson, an Executive Vice President in the Chicago office.
“This asset represents a very unique opportunity in the national marketplace for a core-plus medical office building,” Wilson said. “A Class A facility with a long-term hospital anchor, along with some vacancy for growth and expansion, is tough to find. That was evident in the very strong buyer activity and aggressive pricing.”
Completed in 2008, Lee’s Hill Medical Plaza sits on 5 acres at 10401 Spotsylvania Ave. and features 314 parking spaces.
The building is 91 percent leased and anchored by Mary Washington Healthcare System, which operates a wide range of specialties at the complex. They include a freestanding emergency department, a comprehensive medical imaging practice (through a joint venture with Radiological Associates of Fredericksburg), outpatient laboratory services, a wound center, and administrative support.
The balance of the building is leased to a diverse mix of other medical-related tenants, including the U.S. Department of Veterans Affairs, Radiologic Associates of Fredericksburg, and Virginia Interventional and Vascular Associates.
The property is conveniently located off the I-95 interchange with US Route 1, immediately south of downtown Fredericksburg. The property is also near to two major hospitals — just 5 miles from Mary Washington Hospital and 2½ miles from HCA Spotsylvania Regional Medical Center.
“This was a remarkable opportunity to acquire a premier medical office building in the Washington, DC area,” Kornick said. “Very few such medical office buildings come to market here, so when they do they always garner a lot of interest.”
Flagship Healthcare Properties will be retained as property manager. “We are pleased to continue our relationship with this facility and its tenants as Property Manager under the new ownership,” added Joe Shull, Partner and Director of Property Management for Flagship.
About Avison Young
Avison Young is the world’s fastest-growing commercial real estate services firm. Headquartered in Toronto, Canada. Avison Young is a collaborative, global firm owned and operated by its principals. Founded in 1978, the company comprises 2,600 real estate professionals in 82 offices, providing value-added, client-centric investment sales, leasing, advisory, management, financing and mortgage placement services to owners and occupiers of office, retail, industrial, multi-family and hospitality properties.
About Drake Real Estate Partners
Drake Real Estate Partners (“Drake”) is a New York based private equity real estate investment manager which has invested in over $900 million of real estate across three investment funds. It has invested across a variety of geographies and asset classes, including multifamily, industrial, office/medical office, self-storage, retail, and hospitality. Drake is a proud member of 1% For The Planet, donating 1% of the firm’s revenues to not-for-profit conservation-related initiatives in the markets in which it invests. For further information, visit www.drakerep.com.
About Flagship Healthcare Properties
Flagship Healthcare Properties, LLC (“FHP”) is a fully integrated commercial real estate firm focused on healthcare and professional office properties. FHP was formed in 2010 through the combination of two legacy firms with roots dating back to 1985. FHP provides its clients a full range of real estate services including investment and capital solutions; development; property sales, leasing, and marketing; and facilities, property, and asset management. FHP operates an integrated platform, having developed over 1.6 million square feet and currently managing, directly or indirectly, more than 3 million square feet of primarily healthcare-related office space across more than 100 properties throughout the Southeast and Mid-Atlantic. For further information, visit www.FlagshipHP.com.
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