Drake, Flagship Sells VA Medical Office Asset

The 72,255-square-foot, Class A medical office building was completed in 2008 and purchased by the previous owners in 2014 as a value-add opportunity.

Lee’s Hill Medical Plaza, Fredericksburg,
Lee’s Hill Medical Plaza, Fredericksburg, Va.

A joint venture partnership between Flagship Healthcare Properties and Drake Real Estate Partners has sold Lee’s Hill Medical Plaza, a 72,255-square-foot, Class A medical office building in Fredericksburg, Va. The former owners acquired the property in 2014 as a value-add opportunity, increasing occupancy by more than 20 percent, reaching 91 percent at the time of the recent sale. Avison Young facilitated the transaction.

“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, in a prepared statement.

The property is located at 10401 Spotsylvania Ave., south of downtown Fredericksburg and in close proximity to two other hospitals, Mary Washington Hospital and HCA Spotsylvania Regional Medical Center. The building, completed in 2008, is situated on a five-acre parcel and is anchored by Mary Washington Healthcare System.

Varied mix of medical tenants

Lee’s Hill Medical Plaza is leased to diverse mix of other field-related tenants, including the U.S. Department of Veterans Affairs, Radiologic Associates of Fredericksburg and Virginia Interventional and Vascular Associates.

Lee’s Hill Medical Plaza, Fredericksburg, Va.
Lee’s Hill Medical Plaza, Fredericksburg, Va.

The Avison Young team was led by Principals Jim Kornick, Chip Ryan, Mike Wilson and Erik Foster, as well as Executive Vice President Mark Johnson.

“This asset represents a very unique opportunity in the national marketplace for a core-plus medical office building,” said Wilson, in prepared remarks. “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.”

Flagship Healthcare Properties will continue to manage the property. Last June, the company purchased a LEED-certified medical office building in the New Orleans metro area. 

Images courtesy of Avison Young