Health Systems Choose Folsom to Address Post-COVID Environment

FOLSOM, CA—A 28-acre parcel is now in the hands of a new owner, Dignity Health. The land is located in Folsom Ranch Corporate Center and was sold for an undisclosed purchase price.

This transaction kicks off the Folsom Ranch Corporate Center, a 240-acre developable site for mixed-use commercial space. Dignity Health intends to build a medical office building as phase one of a longer-term plan to develop a comprehensive medical campus. Construction on the medical office building is likely to begin in 2022.

“We are proud of our 40-year legacy of serving the Folsom community, and as the city and surrounding area continues to grow, we are excited to announce our initial plans to grow with it,” said Laurie Harting, Greater Sacramento Division CEO for Dignity Health. “This state-of-the-art medical office building will be an integrated hub that expands access to quality care services that are reflective of the growing needs of Folsom.”

Folsom Ranch Corporate Center is a part of the larger Folsom Ranch project. The corporate center site, comprised of four large parcels, runs from Prairie City Road to east of East Bidwell and south of Highway 50.

“Breaking ground on Dignity Health’s new medical office building marks a major milestone for the entire Folsom community and the broader Sacramento region,” said Sarah Aquino, Folsom mayor. “The past few months have refocused Folsom’s efforts on how we can better meet the needs of our community as the economy begins to recover. Access to high-quality healthcare is vital to our quality of life in Folsom, and critical to economic investment and job creation in our region.”

Since breaking ground in 2017, more than $200 million has been invested on infrastructure to service the Folsom Ranch project. As of late 2018, approximately 600 building permits have been pulled by seven different home builders who are all now actively building and selling homes in proximity to the Folsom Ranch Corporate Center.

“The Folsom community is fortunate to be the beneficiary of Dignity Health’s high quality and accessible healthcare, and we are thrilled that Folsom will be home to this important expansion,” adds Elaine Anderson, Folsom city manager. “Now more than ever, we know that access to quality healthcare is the cornerstone of a healthy community and economy. We are grateful for our longstanding partnership with Dignity Health, and deeply value their long tradition of investing in the health and well-being of Folsom and our surrounding region.”

Newmark Knight Frank’s executive managing director and healthcare specialist Garth Hogan, along with executive managing directors Todd Eschelman, Joe Hamilton and Craig Brinitzer, who are the exclusive listing brokers on the 240-acre project, represented the owner and seller of the Folsom Ranch Corporate Campus, PCCP.

“Folsom Ranch and the surrounding area consist of the ideal demographic to construct a multi-health system campus for the entire continuum of care, birth through life,” said Hogan. “Along with Dignity Health, there continues to be strong interest from additional health systems as well as multi-acuity senior care, which plan to address the post-COVID-19 care environment.”

This future medical facility is particularly important as the healthcare crisis unfolds, Hogan says.

“New ground-up medical office properties will have the advantage of incorporating design features that can accommodate  telemedicine, social distancing, efficient patient and caregiver throughputs,” Hogan tells GlobeSt.com. “Assisted living was heavily impacted by COVID-19, so new facilities will need to address outside air ventilation as well as patient, caregiver and visiting family members’ safety in their design and construction.”

The site is directly across the freeway from Intel’s 1.3 million-square-foot R&D facility which brought 6,000 jobs to the market.

“Paired with the continued demand for more healthcare real estate, we believe the unique topography of Folsom Corporate Center–West will be attractive to a technology, R&D and/or life sciences user,” Eschelman says.

The Folsom office submarket posted a 4.3% vacancy in the second quarter, slightly lower than the first quarter vacancy rate of 4.5%, according to Newmark Knight Frank research. Folsom had the lowest vacancy rate of the 22 submarkets in the Sacramento region. Although net absorption was only 2,179 square feet, it brought the year-to-date total to 48,758 square feet. Folsom benefits from a wide and diverse private sector user base and has one of the highest qualities of life opportunities in the region, according to NKF.