The case for and against

Investment thesis

This page weighs whether the asset is worth the cost of investigating, for whom, and under what conditions. It covers the strengths and the open questions in equal measure, so you know exactly what to verify before spending diligence dollars.

The asset in one paragraph

125 Dillon Drive is a ±10,000 SF single-story former eye-clinic medical office on 1.37 acres in unincorporated Spartanburg County, built 1985, directly adjacent to the 231-bed Spartanburg Medical Center – Mary Black Campus. It is mid-renovation (perimeter suites updated, core opened to studs), vacant, and marketed at $775,000 for sale or $10.00/SF NNN for lease, with owner financing considered and build-to-suit offered. It has been on the market roughly six months as of late August 2026.

The basis argument

At the marketed square footage, the ask equals $77.50/SF. Reference points, each with its scope stated:

The plain reading: the discount to stabilized product reflects the work remaining, not the location. The nearest vacant analog (1770 Skylyn) priced at ~$86/SF and found a buyer within months. What separates $77/SF from $184–251/SF product is a completion budget and tenants, and pricing those two items is what diligence is for. The spread is the opportunity, sized in one number.

Market tailwinds

• Population: Spartanburg County grew from a 328,000 base (2020) to 380,857 (2025): +16.1%, ~2.95%/yr compounded (U.S. Census Bureau, Vintage 2025). Growth accelerated every year from 2021 through 2023 and stayed above +10,900/yr through 2025.
• Healthcare employment: Education & Health Services employment in the Spartanburg MSA rose from 14.1k (Dec 2015) to 17.5–17.8k (2026), about +24% (BLS series SMU45439006500000001).
• Documented provider scarcity: one PCP per 1,610 residents (worse than the SC average), one mental-health provider per 720 (SC: 460), one dentist per 2,030; 140,674 non-admitted ED visits generated $797.6M in charges in FY2023 (2024 CHNA). County health planners want that care shifted to outpatient settings.
• Institutional appetite: 2024–2026 Upstate transactions (a 7-property, 88,385 SF medical portfolio sale; health-system land purchases) show institutional buyers active in SC medical office.

This establishes a growing demand backdrop with lagging provider supply, the setting in which well-located, low-basis medical space is worth underwriting. Building-level demand is what a buyer then confirms in diligence.

Optionality

Four researched paths (each with its own analysis and verdict): owner-user practice (strongest), behavioral-health outpatient (promising, staffing-constrained), multi-tenant medical (conditional), and ASC conversion (a demanding project; see what it would take). Deal-structure optionality is unusual: sale, NNN lease with purchase option, owner financing considered, build-to-suit. A potential 25% state rehabilitation credit exists only if statutory tests are met (analysis).

Open questions to underwrite

• The completion budget. The core is open for build-out and the county rates condition "FAIR"; a contractor-priced scope is the first diligence item, because every scenario's economics key off it.
• Lease-up pace. Space is also available at 130 Dillon and on Skylyn; model conservative absorption. The low basis is what funds the patience.
• Campus trajectory. Mary Black is a stable, established 231-bed campus; SRHS's announced 2023–2026 capital is directed elsewhere, so underwrite the adjacency as a steady amenity.
• Best-fit uses. The single-story wood-frame construction suits offices and clinics well; procedure-heavy facility conversions are a different project (see the ASC study).
• Hold horizon. Spartanburg medical-office trades in small volumes; plan the hold period accordingly.

Who this may fit

• A physician group or healthcare operator that wants to own. This is the flagship case: occupancy-cost arithmetic favors ownership at this basis if renovation stays moderate.
• A behavioral-health or community-health operator backed by referral relationships. The building's low basis is what makes modest-reimbursement models viable.
• A patient value-add investor who can carry the building through renovation and lease-up and underwrites conservative rents.

Where the fit is weaker

• Passive yield buyers: the building is offered vacant, so this is a value-add project rather than in-place income.
• Surgery-center developers: conversion is a major undertaking (see the feasibility study); office-based procedure uses fit the building far more naturally.
• Rehab/PT operators: the campus and corridor already serve this need well; the building's edge lies with the four uses above.
• Underwriting that leans on the tax credit: treat the credit as upside until the vacancy documentation is in hand.

What we would verify first

1. Walk-through with a contractor; renovation scope and budget.
2. County property card and permitted-use confirmation.
3. Vacancy history documentation (drives credit eligibility).
4. Owner-financing terms in writing; compare against SBA 504 quotes.
5. 1770 Skylyn closed price (deed transfer stamps) as the true vacant-analog comp.
6. Phase I environmental; roof/HVAC age and condition.

Every item on this list starts with a conversation with the listing broker.

Sources (government and primary sources first; retrieved 2026-08-23 unless noted)

1. U.S. Census Bureau Vintage 2025 county estimates [T1 · 2020–2025]
2. BLS Education & Health Services employment, Spartanburg MSA [T1 · 2015–2026]
3. Spartanburg County CAMA record (appraised values, construction, condition) [T1 · 2026 extract]
4. 2024 Spartanburg County CHNA (provider ratios, ED utilization) [T2 · 2024]
5. Lee & Associates Greenville/Spartanburg Office Report [T3 · Q2 2026]
6. County CAMA + Upstate Business Journal (1770 Skylyn Dr sale, Dec 2025) [T1/T3 · Q1 2026]
7. Crexi listing 2356244 (asking price, terms — listing-supplied) [T4 · as of 2026-08-23]

Last reviewed 2026-08-23. This page is research, not investment advice.