Kaiser Permanente Spends $22MM to Acquire Natomas Acreage for Expansion

Kaiser Permanente, Natomas, Sacramento, Golden 1 Center, The Railyards, Angelique Ashby, Allegheny Properties
Courtesy of Allegheny Properties

By Meghan Hall

Kaiser Permanente is charting its course for growth in Northern California, this time securing 37 acres in the community of Natomas, Calif., part of northwest Sacramento. Kaiser paid $22 million for the acreage, and the deal was announced by City Councilmember Angelique Ashby via twitter. The seller of the property was Allegheny Properties.

The acreage is known as Natomas Crossing, based on a brochure obtained by The Registry, and it is one of seven other parcels that Allegheny Properties has sold. Combined, the parcels can accommodate up to 2.4 million square feet of office, 1 million square feet of retail, 311,000 square feet of hotel, 600,000 square feet of hospital uses, and 852,000 square feet of multifamily. 

“This addition along I-5 adds to the growing health and innovation corridor taking shape in North Natomas,” said Ashby. “A series of dynamic developments made possible by a tremendous relationship with Allegheny Properties, Dave Bugatto.”

The property will be developed with outpatient services and will replace a separate 12 acres that Kaiser owns, also located in Natomas. Kaiser’s timeline for development is not currently known.

Currently, Kaiser is already working to develop another project in Sacramento at The Railyards. According to a landing page for the project, the development is Kaiser’s third investment into the area, after its opening of its Downtown Commons Medical Offices at 501 J Street in June 2018 and the Golden 1 Center in 2016. At the site, Kaiser intends to build a “state-of-the-art” hospital. The hospital will rise 14 stories and include 420 beds, according to project plans.

In its most recent financial results, Kaiser reported total operating revenues of $93.1 billion for the 2021 fiscal year, up from $88.7 billion in 2020. Total operating expenses were $92.5 billion and $86.5 billion, respectively. 

“After almost 2 years, the COVID-19 pandemic continues to impact Kaiser Permanente just as it does our daily lives,” said Chair and Chief Executive Officer Greg A. Adams in a February statement. “We rapidly rolled out vaccines, and now boosters, and administered more than 9 million COVID-19 tests while managing new and unpredictable variants like delta and omicron as they surfaced. Throughout this crisis, gratitude goes to our dedicated employees and physicians who have remained focused on providing care and strong support for members and communities.”

Kaiser noted in its analysis that its strong investment performance was the result of “robust” financial markets during the course of the year. During 2021, capital spending for the nonprofit totaled $3.5 billion; Kaiser also opened 11 new medical offices. Currently, its portfolio includes 734 medical offices, 39 hospitals, and 58 retail and worksite clinics.

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