Colocation provider Cyxtera Technologies is expanding its presence in Silicon Valley, leasing a 9-megawatt data center being built by Prime Data Centers. The new facility is part of Cyxtera’s effort to add capacity in key markets, which also includes additional space in existing sites in Silicon Valley and Chicago.
The new building in Santa Clara is currently under construction in and is expected to be ready for customers in late 2022. The four-story, 121,000 square foot data center will be Cyxtera’s third building at its SFO4 data center campus, located at a fiber-rich data center cluster. Cyxtera will also add 1.6 megawatts of new capacity at its SFO1 campus, which is just south of SFO4.
“Our customers and partners require access to world-class colocation services and seamless interconnection solutions in top tier markets,” said Nelson Fonseca, President & CEO of Cyxtera. “By adding a new facility in Silicon Valley and bringing more capacity online in our existing facilities there and in Chicago, we’re able to continue delivering Cyxtera’s innovative solutions to even more of our existing and prospective customers.”
Santa Clara has long been the Data Center Capital of Silicon Valley due to competitive power pricing from the municipal utility, Silicon Valley Power. It’s the favored spot to deploy new hardware and services from the Valley’s marquee technology companies, as well as a legion of fast-moving startups. That’s why there’s 35 data centers are located in an 18-square mile municipality.
The expansion Silicon Valley data center market is experiencing a new phase of growth and competition. NTT Global Data Centers Americas has just opened a new data center in Santa Clara, while Cologix recently entered the region with the acquisition of the vXchange Santa Clara site. Elsewhere in Santa Clara, Digital Realty has announced a major new project, while Vantage continues to build out its newest campus. In nearby San Jose, STACK Infrastructure and Equinix are expanding their campuses.
Continued Growth for Cyxtera
Cyxtera has 61 data centers spanning 1.9 million square feet in 29 markets around the world. The company recently agreed to be acquired by Starboard Value Acquisition Corp. (SVAC) in a deal that values Cyxtera at $3.4 billion.
Cyxtera is staying busy and continuing to expand its offerings for its 2,300 customers, including Enterprise Bare Metal offerings, a wide range of networks, and connectivity to major public cloud providers.
“The world-class quality of Cyxtera’s data center facilities in top-tier markets continues to drive robust demand from our existing and prospective customers,” said Randy Rowland, Cyxtera’s Chief Operating Officer. “In analyzing the opportunity to grow our presence in both Silicon Valley and Chicago, we saw significant upside potential to drive growth for our business while delivering the leading-edge solutions our customers have come to expect from Cyxtera.”
Cyxtera’s ORD2 data center is in Elk Grove Village in Suburban Chicago, and will add approximately 2 MW of capacity. Data center activity in Greater Chicago has surged since 2019, when the region’s competitive position got a boost as Illinois approved new tax incentives.
More Leasing Success for Prime
Cyxtera’s expansion is also good news for Prime Data Centers, which announced its Santa Clara project last fall.
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“Adding a company with the global reach and resources of Cyxtera to Prime’s customer list advances our mission of fostering strong partnerships in the industry,” says Jeff Barber, EVP Sales and Marketing at Prime. “Prime strives to develop creative and transparent partnerships such as this, where both parties can realize not only economic benefits but also gain efficiencies via unique and flexible contract structures designed to support the specific needs of the tenant.”
Prime recently announced a strategic partnership with global infrastructure investor Macquarie, which plans targeted capital investments in excess of $5 billion over the next 10 years. Prime is a privately-held developer based in Sacramento, where it is developing a campus at McClellan Park with room for up to six data center buildings. The company recently announced an 8-megawatt build-to-suit lease with a publicly-traded global enterprise.