Business & Real Estate

Sutter Health pays $22 million for land near Sacramento HQ, plans to expand corporate campus

Here’s the latest state-of-art hospitals Sutter Health of Sacramento opened

Sacramento-based Sutter Health on August 25, 2018, opened two new California Pacific Medical Center campuses in San Francisco.
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Sacramento-based Sutter Health on August 25, 2018, opened two new California Pacific Medical Center campuses in San Francisco.

Moving to cut costs and unify work groups, Sutter Health say the company paid $22 million to acquire a dozen or so acres next to its current Gateway Center headquarters across the freeway from South Natomas.

“Sutter Health has had a plan in place to make work more efficient for about 1,900 employees in administrative and business support roles,” Robert Mitsch, vice president of facility and property services for Sutter Health, told The Sacramento Bee in an email Wednesday. “The goal is to reduce the number of office buildings we lease throughout Sacramento and the Bay Area, while maximizing current office space.”

The land purchase includes the former headquarters of the California Farm Bureau Federation at 2300 River Plaza Drive, Mitsch said. Federation leaders said on their website that the organization had moved in June to another building within the Gateway Center office park, 2600 River Plaza Drive. Its headquarters has been in Sacramento since 1979, they noted, and in Gateway Center since 1997.

Mitsch said the real estate strategy will save enough on rent to cover about 60 percent of the purchase price of the new property.

“By the beginning of 2020, Sutter aims to reduce its leased space by 210,000 square feet, saving Sutter Health an estimated $5 million in annual rent costs in the Valley Area alone,” he said. “A similar effort is underway in the Bay Area where Sutter aims to reduce its leased space by 235,000 square feet, resulting in an annual estimated reduction of $8.4 million.”

The purchase also will allow Sutter to create a more connected campus, Mitsch said, noting that the two Sutter-owned office buildings are within walking distance of each other. He added that business teams now housed in separate work sites around the Sacramento Valley will move to the campus.

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Cathie Anderson covers health care for The Bee. Growing up, her blue-collar parents paid out of pocket for care. She joined The Bee in 2002, with roles including business columnist and features editor. She previously worked at papers including the Dallas Morning News, Detroit News and Austin American-Statesman.
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