San Jose Medical Office Owner Pitches Expansion

The owner of Samaritan Medical Center, a medical office campus near a hospital in southwest San Jose, has proposed the next stage of a decades-long plan to expand and modernize the property.

Cilker Henderson Properties filed two sets of plans to replace eight medical offices at 2505 Samaritan Drive and 2512 Samaritan Court with three new ones, resulting in a net increase of 290,000 square feet. Plans also call for demolishing a surface parking lot at 2505 Samaritan, the larger of the two sites, and building three parking garages totaling about 1,400 spaces across it and 2512 Samaritan Court, which are a two-minute walk apart.

The larger of the two projects is 2505 Samaritan, a 6.5-acre lot occupied by a seven-building medical office complex and surface parking. Cilker seeks to bulldoze the entire site and construct two six-story medical offices totaling nearly 314,000 square feet, plus a seven-level parking garage with nearly 1,100 spaces.

The firm, headquartered in one of Samaritan Medical’s buildings, plans to build 2505 Samaritan in two phases, according to a copy of its proposal. It intends to construct the first phase — the garage and one of the buildings — as soon as it obtains all necessary permits. It didn’t disclose a construction timeline for the other building in its application.

At nearby 2512 Samaritan Court, Cilker seeks to replace a multi-tenant medical office totaling 18,000 square feet with a building nearly three times larger. The three-story, 46,000-square-foot structure would be accompanied by an adjacent parking garage with 176 spaces. Cilker intends to break ground on the project as soon as it has all necessary permits, a copy of its plans show.

The firm’s willingness to go spec represents a change in strategy from six years ago, when it filed its initial application to redevelop 2505 Samaritan Drive and a vacant lot across the street into four medical offices and parking garages. It didn’t feel comfortable building those offices without first lining up tenants, then-CEO Dave Henderson told the Silicon Valley Business Journal in 2016.

The new proposals make up a large part of Cilker’s plan to redevelop sections of Samaritan Medical with five new medical office buildings and a trio of parking structures, totaling 475,000 square feet and 1,500 spaces. The 20-year plan’s first phase kicked off in 2020, when a partnership of Cilker and Sutter Health began building a 70,000-square-foot medical office at 2506 Samaritan Court that the latter would occupy once complete. The pair wrapped up construction of the three-story building earlier this year, according to San Jose’s online permit portal.

Meantime, the Good Samaritan Hospital, next door to 2505 Samaritan and one of Silicon Valley’s busier surgical facilities, is contemplating its own expansion. The hospital wants to add over 900,000 square feet of new facilities and overhaul the site of the existing, 451,000-square-foot building, according to plans it filed with the city last month.

The plans don’t qualify as a formal application and are intended to help the hospital better understand what it can do to “increase campus sustainability and enhance patient experience as we comply” with a seismic upgrade mandate, Good Samaritan told the Mercury News. Still, any talk of the hospital expanding bodes well for Samaritan Medical, which isn’t affiliated with Good Samaritan. And it may explain why Cilker wants the city to start reviewing the next stage of its campus’ redevelopment now rather than later.

Medical offices have emerged as a bright spot in a cloudy office market. While other businesses have struggled to get employees to return to their offices as the pandemic fades, the need for in-person service is obvious in the health industry.

And San Jose’s medical office market seems primed to grow. Health care developer PMB and Harrison Street Real Estate Capital filed plans earlier this year to construct a 200,000-square-foot building about four miles north of Samaritan Medical.