South Bay data center deal points to jump in values amid AI tech surge

SANTA CLARA — A data center in Santa Clara has been bought for more than $35 million in a deal that suggests rising values for these kinds of sites during a surge in demand for artificial intelligence technologies.

Colovore, a data center operator that acted through an affiliate, paid $37.2 million for the South Bay property, according to documents filed on April 29 with the Santa Clara County Recorder’s Office.

The AI boom appears to be widening, a surge that is fueling expansion by tech titans such as Nvidia, which highlighted artificial intelligence trends at its packed GTC conferences in downtown San Jose in 2024 and 2025.

The just-bought building was sold by Ellis Partners, a veteran real estate firm that bought the former industrial property in 2022 and then converted the site into a modern data center.

Ellis Partners bought the building for $13.5 million and obtained an $11.5 million construction loan at the time it purchased the property, which is at 3060 Raymond Street in Santa Clara, the county records show.

Colovore also signed a lease for the building prior to the upgrade to a data center. The building totals 29,100 square feet and was built in 1974, according to the LoopNet commercial property database.

The recent deal for the building suggests that Ellis Partners sold the property at a hefty profit.

The latest transaction has a value that’s 48.8% above the $25 million combined purchase price and construction loan amount for the property when Ellis bought it in 2022.

Artificial intelligence hardware, software and services require heightened levels of energy and data, which in turn ratchets up demand for power-efficient data centers.

“The AI revolution is here,” Colovore president and co-founder Sean Holzknecht said in 2022 at the time of the prior transaction. “We look forward to continuing to deliver these innovative solutions to our customers.”