By Meghan Hall
EdgeConneX Inc., a developer of high-powered and highly proximate data centers, has snapped up several Santa Clara properties in a transaction that closed at the end of last week. The firm purchased nearly 229,000 square feet of office and industrial space for $83.25 million from New York-based DRA Advisors LLC. Cushman and Wakefield’s Capital Markets team represented DRA Advisors in the transaction.
The Silicon Valley Business Journal was the first to report on the transaction.
The buildings that EdgeConneX purchased are located at 1600 Memorex Dr., and 1680 and 1800 Richard Ave. and were constructed around 1970. With close proximity to Highway 101 and State Routes 82 and 87, the buildings are close to several other industrial and commercial properties. El Camino Self Storage, Foxconn International and SVcolo are all within the immediate vicinity.
The buildings are also not EdgeConneX’s first foray into the Santa Clara Market. Is also owns the Santa Clara EdgeConneX Data Center located at 1700 Richard Ave. the 19,800 square foot facility is capable of more than 20 kilowatts per cabinet, and features real-time branch circuit monitoring and a variety of network options, including Silicon Valley Fiber. The company also owns a 29,400 square foot facility in Sacramento.
Currently, there are no plans filed with the City of Santa Clara for the Memorex Drive and newest Richard Ave. sites. However, the firm does not speculatively build data centers. According to its website, the company works with customers throughout the entire design and development process to fully customize its data centers. Since 2013, EdgeConneX has built over 40 data centers throughout North America, South America and Europe.
According report released by CBRE at the end of 2019—the most recent information available—wholesale data center inventory increased by 468.7 MW across primary markets in 2019, a 22 percent increase year-over-year. Silicon Valley remained one of the hottest markets in the country for data centers; with 290 MW of capacity, it is ranked third behind Northern Virginia and Dallas/Ft. Worth, markets that have 1,200 MW and 321.4 MW of capacity, respectively. Silicon Valley also had the lowest vacancy rate out of all major markets, at just six percent, down 130 basis points from the previous year. Rental rates also increased, reaching between $135 and $165 kW per month. In the coming years, CBRE predicts that tight fundamentals in Silicon Valley will continue to bolster its position as a main connectivity hub for the Western United States, and available land will continue to trade at all-time highs.