BGO Acquires 11-Property Ambulatory Surgery Center Portfolio From Flagship Healthcare Properties and AEW

BGO has acquired an 11-property portfolio of Class A ambulatory surgery centers totaling approximately 223,000 square feet across nine U.S. markets, the firm announced Sept. 30, 2026. The portfolio was purchased on behalf of BGO's U.S. Core Strategy from a joint venture of Flagship Healthcare Properties and AEW Capital Management. All 11 properties were 100% leased at closing.

Portfolio Scope and Geographic Reach

The portfolio spans the Dallas-Fort Worth, Chicago, St. Louis, Nashville, Lakeland-Winter Haven, Columbia, Huntsville, Kalamazoo-Portage and Prescott markets, with an average facility size of approximately 20,273 square feet. According to CBRE, which advised the seller, 45% of the assets are located in Top 20 metropolitan statistical areas, placing roughly five of the 11 properties in major markets while the remainder are situated in regional healthcare nodes.

The facilities carry established affiliations with major health systems in their respective markets and maintain relationships with national ambulatory surgery center operators. Clinical specialties represented across the portfolio include ophthalmology, orthopedics, gastroenterology, ENT, podiatry, plastic and reconstructive surgery, pain management, urology and endoscopy.

Flagship Healthcare Properties to Continue as Property Manager

Flagship Healthcare Properties will continue to provide third-party property management services across all 11 assets, a role the firm held under the prior ownership structure. Flagship manages approximately 8.95 million square feet of healthcare real estate across more than 435 properties serving more than 815 tenants nationally.

"We have strong conviction in ambulatory surgery centers as an increasingly important part of the U.S. healthcare delivery system, and we're pleased to add a portfolio of this scale and geographic breadth to our U.S. Core Strategy," said Michael Keating, Managing Partner at BGO. "Transactions of this complexity require a high degree of coordination, and we're grateful to the teams involved for helping us execute on behalf of our clients. We also appreciate the work Flagship Healthcare Properties and AEW Capital Management have done to assemble and steward these assets, and we look forward to working closely with Flagship as it continues to manage the properties on our behalf."

CBRE Advised the Seller

Chris Bodnar, Brannan Knott, Zack Holderman, Anthony Sardo, Cole Reethof and Jesse Greshin of CBRE U.S. Healthcare Capital Markets acted as exclusive advisors to the seller. Goodwin Procter LLP served as legal counsel to BGO.

"This is a rare, institutional-quality ASC portfolio offering superior rent coverage ratios and elite health system partnerships," said Knott, Executive Vice President with CBRE's U.S. Healthcare Capital Markets practice. "With 45% of the assets located in Top 20 MSAs, coupled with the ongoing regulatory shift of complex procedures by CMS to the outpatient setting, this portfolio is perfectly positioned to outperform the broader industry."

Market Context: Rising Institutional Demand for Outpatient Facilities

The transaction arrives as institutional appetite for medical outpatient real estate has strengthened considerably. Medical outpatient building investment volume reached $6.7 billion in the first half of 2026, up 21% year over year, while portfolio sales more than doubled from the prior-year period. Average capitalization rates for medical office buildings compressed 35 basis points year over year to 6.8% in the first half of 2026, though pricing remained above long-term averages.

Ambulatory surgery center assets in particular have attracted stronger pricing. A 2026 healthcare investor survey found that 75% of respondents priced ASCs below a 6.50% cap rate, up from 52% in 2025. A separate analysis of 56 ASC transactions over the prior two years found cap rates ranging from 5.56% to 7.91%, with an average of 6.57%. Those figures represent market benchmarks and are not specific to BGO's transaction.

Supply-side dynamics also favor stabilized outpatient properties. Medical outpatient building completions declined in 2025 and were projected to fall another 26% in 2026, while midyear vacancy stood at approximately 9.8%. Constrained new supply can benefit existing, purpose-built facilities — particularly those with specialized surgical infrastructure that can be costly to replicate.

Portfolio transactions have attracted a premium in the current environment. First-half 2026 portfolio transaction volume exceeded $2.6 billion, and portfolio pricing carried an approximately 100-basis-point premium relative to single-asset cap rates in one market analysis. BGO's acquisition of 11 facilities across nine markets provides geographic diversification across multiple health systems and regional economies rather than concentrating exposure in a single asset or market.

BGO reported approximately $100 billion of assets under management together with Bell Partners, which was acquired by Sun Life and combined with BGO on July 2, 2026. The firm serves more than 750 institutional clients and operates in more than 25 cities across 12 countries.