AWS Buys Silicon Valley Site Previously Slated to Become Data Center: Report

PGIM Real Estate was planning to demolish its two-story building on Mission College Boulevard in Santa Clara, across the street from Intel headquarters, and build a data center in its place. Instead, it sold it to Amazon Web Services, whose plans for the site are unclear, but it’s possible that it will finish what PGIM started and build a server farm on the property.

All that is according to Silicon Valley Business Journal, whose “real estate industry sources” said Amazon Web Services paid PGIM $100 million for the 358,000-square foot building in December. PGIM itself bought the property in 2014 for $95 million.

SSV Properties, which PGIM had hired to redevelop the property, secured planning approval to take the 40-plus-year-old building down and build a nearly 500,000-square foot data center on the site in 2019, according to the report.

As customary for AWS and other hyperscalers, the company didn’t buy the property directly, using instead a proxy company called KTJ LLC. It used the same proxy in 2018 to buy a property for a data center in Northern Virginia, according to a Washington Business Journal report.

While Amazon’s seemingly limitless need to expand data center capacity to support its cloud business is famous (at least in our world), it’s hard to say with any degree of certainty that the company will use the Santa Clara site as a data center and not as an office building. Real estate in Silicon Valley is tight and expensive, and it’s also likely that the company is in need of work space for developers and other staff.

Related:Report: Amazon Secures More Data Center Land in Virginia

Yet, it’s not easy to secure planning permission for a large data center (although it is reportedly easier in data center-friendly Santa Clara than in most other places), and it would make sense if AWS found the site attractive in the first place because the city had already greenlighted it for such use.

The current AWS availability region in the San Francisco Bay Area, called us-west-2, consists of three availability zones. Each zone is usually hosted within multiple data centers.

Its other West Coast availability regions are to the north, in Oregon -- one for general use and another for government agencies.