Menlo Equities Toggles to Data Center Plan in Silicon Valley

Menlo Equities will abandon its previously approved plans for a 400,000‑square‑foot office and life sciences campus in Sunnyvale and will pivot to a large‑scale data center on the site.

The decision reflects the accelerating preference in Silicon Valley for artificial intelligence‑driven infrastructure, the San Francisco Business Times reported. The revised plan cuts the original office footprint by roughly 200,000 square feet and replaces the multibuilding research and design concept with a single two‑story data center and an adjacent Pacific Gas and Electric Company substation to support the project’s substantial power requirements.

The shift aligns with surging demand for data‑center capacity as AI companies and cloud providers race to secure power‑dense facilities. Across the region, developers are shelving traditional office projects in favor of data centers capable of supporting AI workloads, which require significantly more electricity and cooling than conventional enterprise computing.

Menlo Equities, run by Rick Holmstrom from its headquarters in Menlo Park, first entered the data‑center sector in 2025 through its Menlo Digital platform, partnering with NRG Energy to develop 350 megawatts of capacity across Northern Virginia, Silicon Valley and Dallas, with delivery expected between 2027 and 2028. The Sunnyvale project, located at 888–894 Ross Drive in Peery Park, is now confirmed as one of those sites. The company has secured 49 megawatts of power — enough to supply more than 10,000 homes — positioning the property as a high‑capacity AI‑oriented facility.

The developer acquired the 9‑acre site for $88.5 million in 2022 and initially proposed two, four‑story office buildings and a six‑level parking structure. The firm hired RMW Architects & Interiors, RHAA Landscape Architects and Newmark’s Joe Kelly and Mike Saign for the original concept. However, by early 2026, filings show the company had taken out a $20 million loan from Northern Trust and secured a redevelopment permit valued at $23.43 million, along with an entitlement extension through November 2026 — steps consistent with advancing a data‑center project.

The site’s industrial zoning further supports the decision, as such zoning is typical for data‑center development. Menlo Equities already owns another Sunnyvale data center at 444 Toyama Drive, purchased from Digital Realty in 2021.

The Sunnyvale project joins more than 30 new data‑center developments underway in California as Amazon.com, Microsoft, CloudHQ, Edgecore and others compete to build capacity.

— Joel Russell