Firm reroutes a creek to deliver an expanded ortho clinic in Lexington, Ky.
Flagship Healthcare Properties rerouted a creek to unlock additional developable land on the campus of Lexington Clinic in Lexington, Ky., enabling it to develop a facility nearly 2.5 times larger than previously allowed. (Photo courtesy of Flagship Healthcare Properties
LEXINGTON, Ky. – As any experienced commercial real estate developer knows, no two projects are alike, and rarely does a development go exactly as planned. But, in addition to the usual challenges, what happens when the client wants to more than double the size of the project after it’s already in planning, and when the change requires winning the approval of two federal agencies not exactly known for their flexibility and speedy decision-making?
Such was the case in early 2023 for longtime healthcare real estate (HRE) firm Flagship Healthcare Properties as it pursued the development of a new orthopedics-focused medical outpatient building (MOB) in Lexington, Ky.
Flagship, a “full-service” HRE firm based in Charlotte, N.C., had established a relationship with Lexington Clinic several years earlier, as it had acquired a portfolio of six MOBs from the group in a sale-leaseback transaction in 2019. Lexington Clinic is a well-established, highly successful and growing multispecialty medical group that traces its roots back to 1920. It employs more than 350 providers, offers more than 30 specialty services and has about 30 locations in central Kentucky.
One of Flagship’s first tasks as the developer of the new project – which the clinic needed to replace a nearby 10,000 square foot leased space that was coming to the end of its term – was to conduct a search for the best site for a new and larger MOB. At the start of the process, Lexington Clinic believed it would need about 20,000 square feet for an orthopedics-focused MOB.
“We conducted a thorough analysis and search and looked at numerous locations for the best location, in terms of patient access,” says Devereaux “Dev” Gregg, Flagship’s executive VP of development, noting that the firm engaged a third-party consultant to assist with the search, “and we came to the conclusion that the best location for the new building was
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