Dev Gregg, Executive Vice President, Flagship Healthcare Properties

Dev Gregg, executive vice president of Flagship Healthcare Properties, sat down with Invest: to discuss the state of healthcare real estate in Jacksonville and throughout the Southeast, the opportunities that exist in this sector, future priorities and the impact population growth has had on the business.

What is the status of your Jacksonville facilities expansion? 

Two years ago, we identified Northeast Florida, particularly Jacksonville, as one of the most vibrant markets in the Southeast for outpatient healthcare development. Local and regional healthcare systems are expanding, and several major independent physician practices are looking to grow their patient base near new residential communities. Since then, we have identified several potential areas for development in both Duval and St. Johns counties. We hope to announce our first development project in the first half of 2025.

What are the biggest opportunities in the medical real estate space? 

Healthcare real estate represents a significant segment of the overall real estate market in the United States, occupying its own niche. Unlike apartments, traditional office, or industrial space, medical real estate exhibits less volatility and greater stability than other sectors, particularly in the Florida market. Countless articles highlight the aging demographic shift, notably the aging baby boomer population, of which I am a part. In Northeast Florida alone, approximately 15% to 20% of the population is over the age of 60, a figure expected to double within the next decade. Furthermore, nationwide data indicates that although only 13% of the population is over 65, this demographic accounts for approximately 35% of the country’s healthcare needs. These statistics show the increasing demand for healthcare services among the aging population, hence the focus of our business — building healthcare facilities to accommodate providers and ambulatory services. 

What strategies do you have in place to continue providing excellent services? 

Flagship operates as a private real estate investment trust with approximately 108 properties in strategically located areas across the Southeastern United States. Headquartered in Charlotte, North Carolina, we have a presence that spans from Florida to Maryland and reaching as far west as Arkansas. Notably, around half of our portfolio is concentrated in the Carolinas. 

Our real estate holdings are managed under Flagship Healthcare Trust, while the operating arm of the company is Flagship Healthcare Properties, overseeing 110 professionals. Our focus lies exclusively in healthcare real estate with an emphasis on outpatient and ambulatory facilities. We do not build or operate in-patient locations (those requiring an overnight stay component) such as hospitals or senior living facilities. Our investment strategy has remained consistent since our inception, and it has proven successful.

If you pay attention to trends in healthcare delivery, both regionally and nationally, a clear trend emerges: decentralization from hospital campuses. The shift reflects more of a consumer-centric approach, like retail strategies. Healthcare providers and hospital systems increasingly seek to establish their presence within communities, aligning with areas of demographic growth and residential development. There’s a growing demand for modern facilities that offer accessibility, visibility, and convenience—a paradigm we’ve been proactive in addressing.

What impact has population growth had on Flagship? 

Population growth has had a profound impact on Flagship’s strategy and operations. We strategically position ourselves in high-growth areas across the Southeast, with a particular emphasis on Florida, where population expansion has been especially pronounced. These regions, often referred to as corridors of significant growth, present both opportunities and challenges for healthcare infrastructure, as an increasing population drives greater demand for medical services and facilities.

The pandemic further accelerated migration trends, particularly to suburban and Sun Belt regions, highlighting the urgent need for modern and accessible healthcare facilities. By leveraging partnerships with leading data analytics firms, we continuously track and analyze demographic shifts, enabling us to stay ahead of the curve in identifying emerging areas of need. This data-driven approach ensures that we focus on markets where population growth creates a measurable gap in healthcare services.

Our ability to act on these insights has allowed Flagship to develop, acquire, and manage properties that align with the evolving needs of these communities. Beyond simply expanding our portfolio, this approach reinforces our commitment to improving access to healthcare in underserved and fast-growing areas. By responding to population trends, we not only position ourselves for sustainable growth but also contribute meaningfully to the well-being of the communities we serve.

Does more attention need to be brought to supply chain disruptions in 2025? 

We closely monitor construction pricing in all our target markets, continuously analyzing whether the costs align with the market rents we need to deliver. It is important for us to ensure that entering a market doesn’t require rental rates that are substantially above market standards. 

Currently, we are pleased by the favorable trendlines in construction pricing, not only within Jacksonville, but across the Southeastern region as a whole. While uncertainties persist in markets like California and New York, where construction costs remain high, we have experienced a cooling-off period elsewhere. 

What is your outlook for Flagship and your industry in the next two to three years? 

In the realm of commercial real estate, healthcare continues to be a solid performer. We often say, “Healthcare real estate is not recession-proof, but it is recession-resistant.” Our segment of the market exhibits a stable trend line, characterized by consistent performance without significant highs or lows. 

On a related note, the term “medical office building” can carry negative connotations due to its association with traditional office spaces, which may evoke images of vacancy. The healthcare real estate industry is undergoing a rebranding effort, opting instead for the term “medical outpatient facilities.”

Flagship is an innovative company with a dedicated team of individuals. Over the past eight years, our workforce has grown from 50 to 110 employees—a testament to our sustained expansion. We’ve witnessed remarkable growth across all our product lines, including development, acquisitions, property management, and leasing. With a promising future ahead, we hold high expectations for continued positive growth within our company.

Update (April 2, 2025 4:56 p.m. EST): This interview has been updated to reflect more recent initiatives at the organization.