Mental health services firm buys San Jose office building in expansion
SAN JOSE — A mental health services firm has bought a San Jose office building in a deal that shows medical companies still seek expansion sites to operate despite economic uncertainties.
LGTC Group, which describes itself as an outpatient mental health center, has bought a southwest San Jose medical office building that at present is occupied by units of Sutter Health, including hospice services.
The mental health firm’s affiliate paid $9 million for the office building, according to documents filed on Aug. 7 with the Santa Clara County Recorder’s Office.
The just-bought building totals 17,200 square feet and is located at 4850 Union Avenue in San Jose, according to county documents and a marketing brochure circulated by Cushman & Wakefield, a commercial real estate firm.
The deal was arranged by brokers Erik Hallgrimsom and Clark Steele of Cushman & Wakefield and Geri Wong of Newmark.
“LGTC is in expansion mode,” said Wong, a senior managing director with Newmark, a commercial real estate firm. “They are a therapy group that specializes in eating disorders and mental health.”
At the time of its property purchase, LGTC Group obtained $7.8 million in financing in two loan packages from JPMorgan Chase, a financial services behemoth.
The firm intends to operate out of the site that it has just bought. The building is located in San Jose’s Little Branham – Rosswood neighborhood.
“LGTC is an outpatient mental health center committed to providing integrated, evidence-based, empathetic mental health treatment for children, adolescents, adults and their families,” the firm states on its website.
Despite wide-ranging economic uncertainties that have eroded the vitality of the Bay Area office market in the wake of the coronavirus outbreak, investors and users still hunger for some categories of office buildings.
Medical companies in particular have begun to actively scout for sites they can occupy.
Plus, office buildings that aren’t huge in size are particularly popular with real estate investors and medical services firms.
“Buildings below 20,000 square feet are hard to find,” Hallgrimson, a Cushman & Wakefield vice chairman, said in a text message he sent to this news organization.
At present, LGTC currently operates clinics near downtown San Jose and in Sunnyvale, Campbell and Burlingame, the firm states on its website. The mental health services firm also operates a residential facility in San Jose’s Willow Glen district.
The health care firm says its experts include a team of child and adolescent psychiatrists, psychiatric nurse practitioners, psychologists, licensed marriage and family therapists, and licensed clinical social workers.
“Members of our team from various disciplines collaborate and coordinate interventions in order to provide the most effective and current treatment options,” LGTC states on its website.
Property experts believe more medical services firms might be on the lookout for additional elbow room.
“These kinds of medical office buildings are definitely in demand,” Wong said.