Mental health services firm buys San Jose office building in expansion

SAN JOSE, Calif. — A mental health services firm has purchased a San Jose office building, demonstrating that medical companies are still looking for new locations to expand despite economic uncertainty.

LGTC Group, which describes itself as an outpatient mental health center, has purchased a medical office building in southwest San Jose that is currently occupied by Sutter Health units, including hospice services.

According to documents filed with the Santa Clara County Recorder’s Office on August 7, the mental health firm’s affiliate paid $9 million for the office building.

According to county documents and a marketing brochure distributed by Cushman & Wakefield, a commercial real estate firm, the newly purchased building is 17,200 square feet and located at 4850 Union Avenue in San Jose.

Brokers Erik Hallgrimsom and Clark Steele of Cushman & Wakefield and Geri Wong of Newmark arranged the transaction.

“LGTC is in expansion mode,” said Wong, a senior managing director at commercial real estate firm Newmark. “They are a therapy group that specializes in eating disorders and mental health.”

LGTC Group obtained $7.8 million in financing from JPMorgan Chase, a financial services behemoth, at the time of its property purchase.

The company intends to operate from the newly purchased site. The structure is 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 company’s website states.

Despite widespread economic uncertainties that have sapped the vitality of the Bay Area office market in the aftermath of the coronavirus outbreak, investors and users continue to seek certain types of office buildings.

Medical companies, in particular, have begun to actively search for suitable locations.

Furthermore, small-scale office buildings are particularly popular with real estate investors and medical services firms.

“Buildings under 20,000 square feet are difficult to find,” Hallgrimson, a vice chairman at Cushman & Wakefield, said in a text message to this news organization.

LGTC currently operates clinics near downtown San Jose, as well as in Sunnyvale, Campbell, and Burlingame, according to the company’s website. The mental health services company also runs a residential facility in San Jose’s Willow Glen neighborhood.

A team of child and adolescent psychiatrists, psychiatric nurse practitioners, psychologists, licensed marriage and family therapists, and licensed clinical social workers are among the experts listed by the health care company. “Members of our team from various disciplines collaborate and coordinate interventions in order to provide the most effective and current treatment options,” the LGTC website states.

Property experts believe that more medical services firms may be looking for more space.

“These kinds of medical office buildings are definitely in demand,” said Wong.