Sobrato Organization Sells San Jose Data Center for $86M

The Sobrato Organization has sold a 103,400-square-foot data center in northeast San Jose for $86.25 million.

The Mountain View-based developer sold the single-story building at 1735 Lundy Avenue to Atlanta-based Invesco Advisors, the Silicon Valley Business Journal reported.

An Invesco affiliate paid $834 per square foot for the home of Equinix’s SV3 data center.

Affiliates of Sobrato had owned the 6.75-acre property since the mid-1980s, according to the Business Journal. The Mercury News reported Sobrato bought the property in 2010 for an undisclosed price.

Equinix purchased the data center from AboveNet Communications in 2004 for $900,000. It also assumed AboveNet’s lease that began in 2000 and ran through 2020, with extension options.

The building had an assessed value of $21 million in July 2022, according to the Mercury News, citing Santa Clara County Assessor’s records.

Data centers have become a popular commercial investment in an uncertain economy and at a time of rising Bay Area office vacancies in the era of remote work.

The Lundy Avenue deal came two weeks after Sobrato sold a Cupertino strip mall to MetLife Investment Management for $92.5 million.

Invesco has been an active investor in Silicon Valley real estate.In October, a joint venture with Invesco sold an office building it developed in Sunnyvale’s Peery Park district for $222 million. A year ago, it paid $119 million for a five-building industrial park in Morgan Hill.

— Dana Bartholomew