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Friday, Aug 12, 2022

Serverfarm Strikes $71 Million Deal for El Segundo Headquarters

Serverfarm and Culver City-based NantWorks have purchased a data center in El Segundo for $71 million from T5 Data Centers.

The 117,500-square-foot building at 444 N. Nash St. will act as Serverfarm’s headquarters. Serverfarm and NantWorks have partnered on other projects.

Serverfarm, which also has an office in the United Kingdom, manages the physical infrastructure for data centers. In total, the company owns or manages more than 100 locations in more than 40 countries.

The Nash Street property was 80% leased at the time of the sale, according to CoStar Group Inc. It has hyperscale, transportation, health care and government tenants.

Serverfarm modernizes the facilities it acquires with a data center management as a service technology. The company uses InCommand technology to increase the capability of its centers.

The El Segundo property will be updated to increase capacity.

“Throughout the pandemic, we’ve been laser focused on delivering much-needed capacity to our clients and partners in the most efficient way possible,” Avner Papouchado, Serverfarm chief executive, said in a statement.

“The latest phase of our data center acquisition strategy is helping to answer demand for efficiently managed co-location space in a Los Angeles site that’s a launching pad to APAC and the rest of the world. We’re proud to offer our world-class InCommand DMaaS solution in a community that’s home for myself and many of our team members,” he added.  

Demand for data centers in Los Angeles County increased 25% from 2019 to 2020, according to a report released in March by Jones Lang LaSalle Inc.

The pandemic-fueled rise in remote working is expected to continue driving that demand, and developers are taking note.

There are currently about 2.3 million square feet of data center space in L.A. and another 160,000 square feet are under construction, according to JLL.

Internationally, data center activity passed $30 billion last year, according to JLL. That was led by San Francisco-based Digital Realty Trust Inc.’s $8.4 billion purchase of European data center operator Interxion.

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans covers real estate for the Los Angeles Business Journal. A USC grad, Madans has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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