San Jose Retail Site Owner Tries Medical Office Conversion

The owner of a half-acre retail site in southwest San Jose seeks to turn it into a four-story medical office building, another sign of growing interest in the sector among the city’s landowners and developers.

The Farakesh family, through a firm named KLN Management, filed plans with the city last week to construct a nearly 53,500-square-foot structure spanning two adjoining parcels at the southwest corner of South Bascom and Maywood avenues. The site is less than half a mile from the Santa Clara Valley Medical Center, a 70-acre campus with more than 700 hospital beds.

KLN’s project involves demolishing nearly 5,000 square feet across several buildings partially occupied by a massage therapist and a beauty salon, according to Google search results. The building that would take their place would have about 28,000 square feet of medical offices and 2,200 square feet of ground-floor retail. Parking would be provided through a 19-space lot at the project’s entrance and an additional 33 spaces underground.

Online information on the Farakesh family, which has owned the project site for over a decade, and KLN is scarce, as the latter doesn’t have a website. Nick Farakesh, listed as the applicant on KLN’s proposal, didn’t respond to requests for comment.

The family’s plans reinforce the idea that San Jose’s medical office market remains strong, buoyed by plans for new facilities from Kaiser Permanente and Good Samaritan Hospital. Hospitals in Santa Clara County, which includes San Jose and 14 other cities and towns, are in “pretty good shape, but I wouldn’t say that they’re totally out of the woods as far as needing to provide care for Covid-19 patients,” Dr. Sara Cody, the county’s health officer, told its board of supervisors earlier this month.

The healthcare sector’s long-term outlook is sturdy given that more than a quarter of the county’s population will be 60 or older by 2030, according to its social services agency.

Within the San Jose medical office market, the city’s west side has seen a few large projects pitched this year. Cilker Henderson Properties filed two sets of proposals to replace eight medical offices at the firm’s Samaritan Medical Center with three new ones, resulting in a net increase of 290,000 square feet. Four miles north of Samaritan Medical, health care developer PMB and Harrison Street Real Estate Capital aim to construct a 200,000-square-foot building. And in North San Jose, Kaiser Permanente is considering a conversion of 200,000 square feet of regular offices to medical use.