Equinix Secures San Jose Office Portfolio for Large Scale Data Center Conversion

Data center giant Equinix has purchased six San Jose buildings for $51 million, as Silicon Valley transforms traditional office assets into high-density AI hubs.

By: AXL Media

Published: Mar 10, 2026, 5:05 AM EDT

Source: https://therealdeal.com/

The Transaction and Asset Transition

Equinix, operating through an affiliate, finalized the purchase of the six building portfolio in early March 2026. The properties are located at 6800 Santa Teresa Boulevard, 140 Great Oaks Boulevard, and 6541 Via Del Oro. Notably, the $51 million sale price represents a slight haircut for the seller, Kennedy Wilson, which originally acquired the buildings in 2020 for $53.5 million. This marginal decline in valuation reflects the broader cooling of the traditional office market, even as the underlying land becomes more valuable for industrial and technical repurposing.

Equinix’s strategy appears focused on creating a concentrated "data center campus" in the south San Jose corridor. The acquisition places the company in a dominant position near its existing facilities, allowing for shared infrastructure and streamlined management. The move follows a broader trend where legacy office parks are being scrutinized for their potential to house the cooling systems and server racks necessary for generative AI development.

Regulatory and Power Infrastructure Landscape

A critical factor enabling this acquisition is the recent energy agreement between the City of San Jose and Pacific Gas & Electric (PG&E). This deal was specifically designed to guarantee power delivery for large scale industrial users, mitigating the "power lag" that has historically stalled data center projects in neighboring Santa Clara. Equinix has already benefited from this arrangement; in January 2026, its facility at 123 Great Oaks Boulevard doubled its electrical capacity to 40 megawatts, becoming the first project to utilize the new municipal power guarantees.

For Equinix and its competitors, securing a reliable energy pipeline is often more challenging than acquiring the real estate itself. By purchasing buildings in a zone with pre-approved or prioritized power upgrades, Equinix is effectively buying time and certainty in a market where computing latency and deployment speed are competitive necessities.