CoreSite Buys Santa Clara Sites for Possible Data Centers

Three buildings in Santa Clara have traded hands, setting potentially all of the space up for a future as data centers.

Data center developer CoreSite, acting through an affiliate, acquired the buildings from private equity and investment firm GI Partners for $100 million, the Mercury News reported. GI Partners bought the structures at 2805 and 2855 Bowers Avenue and 2710 Walsh Avenue in 2021 for $79 million. CoreSite paid 26.6 percent more for the buildings than GI Partners did, signaling that buildings with the potential for data center development could fetch higher prices despite a weakened overall Bay Area office market.

When GI Partners owned the buildings, the firm looked to develop a 244,100-square-foot data center at 2805 Bowers Avenue by demolishing the existing building on the site. The City of Santa Clara approved the proposal in 2024. GI’s plans for the other sites were not clear.

CoreSite has not disclosed plans for the three buildings, including whether it hopes to follow through with GI Partners’ proposal or convert the existing structures into data centers.

Data centers in Santa Clara County have been attracting investor interest as artificial intelligence increases its foothold in the Bay Area and beyond.

In November, Brookfield subsidiary Centersquare bought two adjacent data centers in Santa Clara from Menlo Equities for $97 million in cash, one at 4650 Old Ironsides Drive for $55 million and the other at 4700 Old Ironsides Drive for $42 million.

A month prior, a Goodman Group affiliate purchased a site in north San Jose that has been proposed for a data center. The 46.8 acres at 350 and 370 West Trimble Road are largely vacant.

Power delivery is also an issue for these facilities. Data center developers Digital Realty Trust and Stack Infrastructure each built data centers in Santa Clara, though they might not get full power until 2028 as city-owned utility Silicon Valley Power doesn’t yet have the capacity to deliver enough electricity needed to fuel the power-hungry facilities.

The city of Santa Clara has nearly 60 active or under-construction data centers, the Los Angeles Times reported.

— Chris Malone Méndez