Sutter Health Buys East Sacramento Office Building Entitled for Hotel Redevelopment

Sutter Health has bought an East Sacramento office building not far from one of its flagship medical centers in Midtown Sacramento.

According to brokers from Turton Commercial Real Estate, the health care provider closed escrow earlier this month on 3000 L St., a three-story building once entitled for redevelopment as a hotel.

“The building is planned for future expansion efforts at Sutter to help increase care access,” Liz Madison, a manager of media relations with Sutter Health, said in an email. She said that’s the only information she had about the purchase at this time.

Turton Commercial Real Estate said Sutter bought the building for $4.85 million, or about $219 a square foot for the 22,164-square-foot building.

Four years ago, D&S Development bought the building for $3.3 million and got entitlements the following year to redevelop the property into a six-story, 133-room Homewood Suites hotel.

But this year, D&S decided hotel development was outside the company’s typical expertise of urban infill housing projects and put the building up for sale with Turton Commercial.

According to a newsletter from Turton Commercial that described the sale, the seller’s goal was to either keep and improve the building as a medical office investment or find larger-scale health care users who might later explore redevelopment.

“The latter path was chosen resulting in a very positive outcome for the investor,” the newsletter states.

Built in the 1980s, 3000 L St. currently has a handful of tenants, including two dentists’ offices and Gameday Men’s Health Central Sacramento, which offers services such as testosterone therapy and vitamin injections, according to its website.

If Sutter Health explores redevelopment for the building, it might have to start fresh. The city of Sacramento’s 2022 approvals for a hotel project at 3000 L St. were good for three years but appear to have expired in August 2025, and city records do not show any applications seeking an extension.

Sara Lebastchi, vice president of operations at D&S, didn’t return an email seeking comment on the sale.

Turton Commercial brokers Ken Turton, Matt Axford, Kimio Bazett, Scott Kingston and Kaylyn Ibarra represented the seller in the deal. Curt Allen and Eric Ortiz of Colliers represented Sutter Health.