Alexis Budge, Executive Vice President & Director of Investor Relations, Flagship Healthcare Properties, LLC

Invest: spoke with Alexis Budge, executive vice president and director of investor relations at Flagship Healthcare Properties, about investor sentiment, outpatient healthcare real estate, and growth opportunities across the Southeast. “Investors today are much more interested in understanding the investment at its core, and they are doing a lot more digging than they were before,” Budge said.

How would you describe investor sentiment toward healthcare real estate today? What are you prioritizing in this environment?

After 12 to 24 months of a high-interest-rate environment where people really stood still, investors are engaged right now. That shift has been a lot of fun. Not only are they engaged in understanding what investments are out there, but they are honing in on specific opportunities.

Investors today are much more interested in understanding the investment at its core, and they are doing a lot more digging than they were before. They want more information and more access, especially in private markets. For a long time, it was our responsibility to educate investors and their advisors on what the private space looked like, what a private REIT was, and what healthcare real estate meant, particularly in our niche of clinical outpatient medical office.

That education is still important, but advisors and investors are much more informed now. They are asking better questions, conducting deeper diligence, and placing more emphasis on the quality of the partner they are investing with. We enjoy that shift because it creates a more balanced, thoughtful relationship. We are also seeing capital flows returning, alongside more substantive conversations before investment decisions are made.

As the market stabilizes, how are pricing expectations, deal activity, and returns evolving?

The interest rate environment created a pause in activity, but we are now seeing that open back up. Capital is flowing again, and the spread between buyers and sellers has narrowed. Rates remain elevated, but they have stabilized, which is encouraging sellers to reenter the market.

As a result, deal activity is picking up. The pipeline is full, with a significant number of opportunities under evaluation. That stability also makes underwriting more predictable, which is critical for transaction activity.

How is the shift toward outpatient care influencing the types of assets you are targeting?

Clinical outpatient healthcare has been our focus for years, so this is not a new direction for us. There was a time when being highly specialized may have been viewed as a limitation, but now investors want expertise and focus. They want to work with partners who truly understand their niche.

We are a private, vertically integrated platform focused exclusively on clinical outpatient medical office. That specialization has become a strength. Investors want to know that their partners are experts, not generalists chasing trends.

Outpatient care is fundamental to healthcare delivery. It is not cyclical, and it is mission-critical. We saw that clearly during COVID. The shift toward outpatient care continues to accelerate, and because we have long operated in this space, we are well positioned to meet that demand.

What makes Charlotte and the broader Southeast attractive for healthcare real estate investment?

The tailwinds in the Southeast remain strong. Population growth continues to drive demand, particularly among seniors, who are the primary users of healthcare services. The region is also attracting top physician talent from across the country.

That combination of population growth and high-quality providers creates significant opportunity. Patients are seeking access to excellent care, and increasingly, people are traveling to the Southeast for specialized treatment.

This is also a relationship-driven business. While competition has increased as more investors enter the market, expertise and experience still matter. Not everyone can operate effectively in this niche, and our long-standing relationships and integrated platform give us a competitive advantage.

Are there specific markets or trends within the region gaining momentum?

Charlotte continues to see strong growth across industries, and that drives healthcare demand. Beyond that, markets like Florida and Nashville are experiencing significant expansion as well.

We are not focused on competing in the largest primary markets. Instead, we target secondary and tertiary markets where healthcare systems are expanding and communities are growing. These areas often offer strong opportunities as new facilities are needed to support population growth.

How are cost pressures affecting tenant demand, leasing decisions, and long-term stability?

With market stability returning, healthcare systems are increasingly looking to monetize their real estate. They want to deploy capital into operations, technology, and talent.

Additionally, the outpatient model is improving convenience and accessibility for patients. In many parts of the Southeast, patients have multiple location options for care, which encourages more frequent engagement with the healthcare system.

Outpatient care also delivers cost efficiencies for providers and insurers. Insurance companies are actively encouraging procedures to move to outpatient settings. More surgeries are being performed in outpatient facilities, reflecting both technological advancements and economic benefits.

This shift supports long-term demand for outpatient medical space and reinforces the stability of these assets.

How are you approaching development versus repositioning existing assets?

Development costs increased significantly in recent years, so we have had to be selective. Development has always been part of our strategy, but not the majority of it. We focus on core, value-add, and development opportunities where they make sense.

We prioritize projects where we have alignment with physicians or health systems, often with pre-leasing or anchor tenants in place. We are also seeing strong opportunities in repositioning existing assets into medical use.

Not all properties are suitable for conversion, but when the right conditions exist, such as adequate parking and layout, these projects can be successful. We recently converted a former call center into outpatient medical space, which worked well because it had the parking needed for medical use.

How is technology shaping your operations and the broader sector?

Technology is critical for improving efficiency, particularly in reporting and communication with investors and advisors. Transparency and responsiveness are key priorities, and technology helps us deliver on those expectations.

In terms of healthcare delivery, there has been concern that telehealth and AI might reduce demand for physical space. In reality, we are seeing the opposite. Telehealth has increased patient engagement and strengthened relationships between patients and providers.

As a result, patients are more likely to seek in-person care when needed. Healthcare providers still require physical space for examinations and procedures, and many are reconfiguring their facilities to accommodate both in-person and virtual care.

Technology is enhancing the healthcare experience, but it is not replacing the need for physical medical space.

What are your top priorities for the next few years?

Our focus is on continuing to scale the platform across our target markets in the Southeast and southern mid-Atlantic. We will continue to build relationships with healthcare systems and physician groups as they expand.

We are also seeing continued real estate monetization by health systems, which creates opportunities for us to partner with them. We are also expanding our presence in the advisory channel, working more closely with RIAs and institutional advisors.

From an investor relations perspective, our priorities are transparency, communication, and responsiveness. We want to ensure that investors receive timely, clear information and that we are meeting them where they are, both in terms of technology and engagement.

Ultimately, our goal is to support healthcare providers with high-quality space while delivering strong, consistent performance for our investors.