GREENSBORO, N.C. – While it has flown under the radar a bit in the HRE sector, 10-year-old Austin, Texas-based Virtus Real Estate Capital has now acquired 47 medical office properties with affiliates and joint venture partners.
In recent weeks, the private equity real estate investor partnered with Charlotte, N.C.-based Flagship Healthcare Real Estate Fund in purchasing the Professional Medical Center (PMC) in Greensboro. The 81,570 square foot MOB is at 1002 N. Church St. in Greensboro, adjacent to Cone Health’s 536-bed Moses H. Cone Memorial Hospital.
The seller, according to data from real estate researcher Real Capital Analytics (RCA) Inc., was Greensboro-based Brown Investment Properties Inc., which completed the facility in 1998 and which will continue to provider property management and leasing services. The building is 94 percent leased, with tenants including Eagle Physicians, Eagle Gastroenterology, Eagle Endocrinology, Central Carolina Surgery and the Breast Center of Greensboro.
RCA’s data notes that the sale price was $12.47 million, or about $153 per square foot (PSF). The pro forma capitalization (cap) rate, an estimated return on an investment, was 8.7 percent, according to RCA’s data.
According to Virtus and Flagship officials, the MOB benefits from growing demand for medical services in an area with strong demographics, as well as from the growth of Cone Health as it enters a new management agreement with Charlotte-based Carolinas HealthCare System.
For Flagship Healthcare Real Estate Fund, a private equity fund affiliated with Charlotte-based Flagship Capital Partners LLC, the building is the fourth in its portfolio, which is focused on investments and developments in the Southeast part of the country.
“We’re excited to announce our investment and operating partnership with Flagship,” said Terry Thompson, president of Virtus Real Estate Capital, in a statement. “We are confident that we’ve chosen a quality, best-in-class operator and real estate sponsor with strong expertise for medical office assets in this specific market.
He added that the equity firm plans to expand its relationship with Flagship while “pursuing similar quality healthcare assets.”
Charles Campbell, managing partner of Flagship Capital Partners, said the company’s partnership with Virtus represents a “perfect opportunity for us to leverage our expertise in medical office real estate management and sponsorship in this area. The Professional Medical Center property is an excellent addition to our portfolio and we couldn’t have done it without the backing of a strong partner like Virtus.”
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