A Sunnyvale office and research building leased entirely by Nvidia has changed hands for $99.6 million, more than triple what it sold for just three years earlier when it sat vacant. Blackstone Real Estate, through an affiliate, acquired the 134,200-square-foot building at 350 Cobalt Way, capping a remarkable turnaround for a property that couldn't find a tenant not long ago.
The sale was reported by The Mercury News, which detailed how commercial real estate firm JLL had been marketing the property before the deal closed. PSAI Realty Partners, the seller, paid just $31 million for the two-story structure in 2023 — a fraction of what Blackstone ultimately agreed to pay for it this year.
That earlier sale came at a low point for the building. Fujitsu sold 350 Cobalt Way to PSAI Realty Partners in January 2023, disclosing at the time that its own lease on the space would expire that September, leaving the property empty. It stayed that way until Nvidia stepped in.
Nvidia's Long-Term Bet on the Building
Nvidia leased the entire building in 2024, signing on through August 2036 — a commitment that appears to have driven much of the jump in value. Originally constructed in 1978, the building was renovated in 2022, and Nvidia, a Santa Clara-based technology company, is now conducting additional improvements on the property with upgrades for possible data-center capabilities.
JLL has described 350 Cobalt as one of Nvidia's few research-and-development labs equipped with data-center facilities, calling it mission-critical infrastructure for the chipmaker. The building carries 10 megawatts of power capacity, according to JLL — a detail that matters more than usual given what's happening with electricity supply elsewhere in the region.
Power Constraints Loom Over Silicon Valley Data Centers
Nvidia's own hometown offers a cautionary tale about what happens when demand for computing power outpaces the electrical grid. In nearby Santa Clara, two data-center projects — including a 48-megawatt Stack Infrastructure development — may sit empty for years because the local utility isn't ready to supply electricity, according to Fortune. Santa Clara had 57 active or under-construction data centers as of a city council presentation cited in that report.
Silicon Valley Power is in the midst of a $450 million system upgrade meant to meet the needs of data-center customers, with the project on schedule for completion in 2028, Fortune reported. The stakes are only growing: electricity requirements from AI computing are projected to more than double in the United States by 2035, and access to power is emerging as the biggest constraint on new data-center development amid surging cloud-computing and AI demand.
Against that backdrop, a fully leased, power-equipped building already tied to one of the industry's most valuable companies looks like a rare commodity. Nvidia's 12-year lease commitment through 2036 gives Blackstone a long runway of guaranteed occupancy in a market where finding power, not tenants, has become the harder problem to solve.
