Centersquare is growing its foothold on the West Coast as the Bay Area’s artificial intelligence boom is the name of the game.
The Texas-based Brookfield subsidiary specializing in data centers plunked down $97 million in cash for two data centers in Santa Clara, the Mercury News reported. The seller was Menlo Equities, acting through affiliates. The square footage and megawatts weren’t reported.
The deal included $55 million for the data center at 4650 Old Ironsides Drive, and $42 million for 4700 Old Ironsides Drive, adjacent buildings next to Levi’s Stadium.
The purchase comes a month after Centersquare announced it spent $1 billion to buy 10 data centers across North America, bringing its portfolio to 80 properties. Centersquare did not disclose whether the Santa Clara data centers were part of that transaction.
Data centers have become a hot commodity as the AI boom takes off, especially in the Bay Area. San Jose and the South Bay, including Santa Clara, are seen as prime real estate to beef up data center operations. Pacific Gas & Electric, based in Oakland, has been eyeing the South Bay to increase its capacity to deliver more electricity to data centers, which are known for gobbling up power and drinking water.
Two other data center developments in Santa Clara have been awaiting use due to a lack of power.
Digital Realty Trust and Stack Infrastructure, two global heavyweights in the sector, have multimillion-square-foot data centers in Santa Clara that are collecting dust because city-owned utility Silicon Valley Power doesn’t yet have the capacity to deliver enough electricity to turn on the power. Digital Realty applied to build its 430,000-square-foot facility back in 2019; Stack completed its 551,000-square-foot data center in 2021. Blue Owl Capital, which acquired Stack earlier this year, also has a vacant 48-megawatt facility nearby.
Elsewhere in Santa Clara County, last month, a Goodman Group affiliate purchased a site in north San Jose proposed for a data center. The 46.8 acres at 350 and 370 West Trimble Road are largely vacant, though a partially occupied office complex is nearby.
The city of Santa Clara has nearly 60 active or under-construction data centers, the Los Angeles Times reported.
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