Sale of five buildings gives Lexington Clinic millions to invest

Five buildings in Lexington Clinic’s real estate portfolio have been purchased by a Charlotte-based real estate investment trust.

The price paid by Charlotte-based Flagship Healthcare Trust for the 144,247 square feet of office space was about $48 million, according to Brandon Thomas, a media executive with Lexington Clinic marketing. A release from Flagship said Lexington Clinic has long-term leases on all the buildings.

Thomas said that the transaction was solely a real estate deal and that operations within the buildings will remain under the control of Lexington Clinic. Proceeds will give Lexington Clinic equity capital to invest in other projects, Thomas said.

“We are proud to have been selected as their real estate partner for this attractive portfolio, and we are honored to welcome the Lexington Clinic as investors” in the Flagship real estate investment trust, said Gerald Quattlebaum, senior vice president of acquisitions with Flagship Healthcare Properties.

Lexington Clinic is Central Kentucky’s largest multispecialty medical group.

The original clinic building at 1221 South Broadway is not included in the sale, according to Joli Blanks, marketing director with Flagship. As of July 2018, Lexington Clinic was planning to demolish the 1221 South Broadway location and replace it with two new buildings in an expansion valued at $69.7 million.

Thomas said that the plan has changed to one new building, and the price tag for that single building has not yet been set. However, he said that Lexington Clinic expects the new building to be up and operating by September 2020.

Charles Campbell, chief executive officer of Flagship Healthcare, said that Flagship looked forward “to bringing the full resources and capabilities of the Flagship team to bear in supporting the clinic’s continued growth and success going forward.”

The buildings acquired include the Lexington Clinic Ambulatory Surgery Center at 1225 South Broadway, the Lexington Clinic East office building off Richmond Road, Lexington Clinic Beaumont office building, and the Jessamine Medical Center building.

The Flagship trust owns clinical outpatient healthcare assets in the United States and was started in early 2018, according to the release. The Lexington Clinic “portfolio increases the total market value of Flagship’s assets to nearly $350 million, including more than 40 properties in nine states.,” Flagship said in a news release.

Real estate investment trusts give investors access to assets that they otherwise wouldn’t be able to buy, such as large office buildings, according to the Motley Fool website.

This story was originally published January 3, 2019 at 4:36 PM.