Major Industrial Player Enters Silicon Valley Data Center Market
In a significant move that underscores the growing demand for digital infrastructure in technology hubs, global logistics firm Goodman has acquired a strategic 46.8-acre property in San Jose, California for $200 million. The purchase comes as the site undergoes rezoning specifically for data center development, positioning Goodman to capitalize on the Silicon Valley’s insatiable appetite for computing power and cloud services.
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According to Santa Clara County property records cited in industry reports, an affiliate of Goodman Group purchased the properties at 350 and 370 W. Trimble Road from LBA Realty. The transaction represents one of the larger industrial real estate deals in the Bay Area this year and signals Goodman’s continued strategic pivot toward digital infrastructure assets.
From Manufacturing to Digital Infrastructure
The acquired site currently houses lighting manufacturer Lumileds but is poised for transformation into a state-of-the-art data center campus. The property includes both the existing manufacturing facility and adjacent vacant land, providing ample space for redevelopment. This transition from industrial manufacturing to digital infrastructure reflects broader industry developments as traditional industrial zones evolve to support the digital economy.
Earlier this year, previous owner LBA Realty had filed plans to construct two data centers on adjoining plots at the location. The proposed development includes a 206,300 square foot facility on an 18.1-acre parcel, accompanied by office space and an electrical substation. A second 10.3-acre plot would host another data center and office complex spanning 208,000 square feet.
Location Strategy in Competitive Silicon Valley Market
The San Jose acquisition represents a calculated expansion by Goodman into one of the world’s most competitive data center markets. Silicon Valley continues to experience robust demand for data center capacity driven by technology giants, cloud providers, and enterprises undergoing digital transformation. The strategic importance of this location is further highlighted by Goodman Group’s expanding data center portfolio across key global markets.
This isn’t the first data center-related activity in the immediate area. In 2021, LBA Realty sold 21 adjacent acres to Microsoft for $78 million, though development on that parcel has yet to commence. The concentration of data center investments in this specific corridor suggests emerging infrastructure clustering effects that could create synergies for future tenants.
Goodman’s Global Data Center Ambitions
While traditionally focused on logistics and industrial real estate, Goodman has been aggressively expanding its data center footprint worldwide. The company claims to have a global power bank of 5GW across 13 cities, with 2.7GW secured and 2.3GW in advanced procurement stages. This substantial power allocation underscores the scale of Goodman’s ambitions in the digital infrastructure space.
The company’s global data center portfolio spans multiple continents, with projects in operation or development across Hong Kong, Australia, Germany, the United States, France, and Japan. This international expansion occurs alongside recent technology innovations that are reshaping data center design and operations worldwide.
Timing and Market Context
The San Jose acquisition comes as Goodman recently topped out a 32MW data center in Los Angeles, scheduled for handover next year. This parallel development activity demonstrates the company’s capacity to execute multiple major projects simultaneously while maintaining development momentum.
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The property has seen multiple proposed uses over the years, having been previously earmarked for residential, retail, office, and manufacturing redevelopment. Its ultimate designation for data centers reflects the premium that developers now place on properties suitable for digital infrastructure, particularly in supply-constrained markets like Silicon Valley. These strategic real estate decisions are increasingly influenced by cloud infrastructure requirements and connectivity needs.
Industry Implications and Future Outlook
Goodman’s entry into the Silicon Valley data center market through this substantial acquisition signals several important industry trends:
- Increased competition for suitable data center properties in established technology hubs
- Continued convergence between industrial real estate and digital infrastructure assets
- Growing investor appetite for data center development opportunities in supply-constrained markets
- Accelerated rezoning of industrial properties for digital infrastructure uses
As the digital economy continues to expand, strategic acquisitions like Goodman’s San Jose purchase will likely become increasingly common. The transaction demonstrates how traditional industrial real estate players are adapting to capitalize on the growing demand for data center capacity, particularly in technology-centric regions where digital infrastructure has become critical economic infrastructure.
Neither Goodman nor LBA Realty has commented publicly on the specific data center development plans or the timing of construction. However, given the property’s ongoing rezoning process and Goodman’s track record of development execution, industry observers anticipate movement on the project in the coming quarters.
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