SUNNYVALE, Calif. — Blackstone Real Estate has acquired a 134,200-square-foot manufacturing and research facility in Sunnyvale for $99.6 million (with initial market estimates reporting $95 million). The property at 350 Cobalt Way is fully leased to AI chipmaker Nvidia under a long-term commitment through August 2036.
The acquisition reflects growing investor demand for power-dense industrial infrastructure capable of supporting advanced technology, artificial intelligence compute, and high-tech manufacturing in Silicon Valley.
Key Asset and Deal Specifications
PROPERTY PROFILE & LEASE TERMS
Asset Address 350 Cobalt Way, Sunnyvale, CA
Building Size 134,200 sq. ft. (Two-story R&D / Production)
Final Sale Price $99.6 Million (Initial estimates ~ $95 Million)
Power Capacity 10 Megawatts (MW)
Sole Tenant Nvidia Corporation (100% Occupancy)
Lease Horizon Through August 2036 (3% Annual Escalation)
Seller PSAI Realty Partners
Strategic Focus on Electrical Capacity
While traditional Silicon Valley commercial real estate metrics prioritize office square footage or location, the acquisition of 350 Cobalt Way underscores the premium being placed on electrical grid infrastructure.
- High Power Density: The property delivers 10 megawatts (MW) of electrical power capacity. This level of grid connectivity is uncommon for a 134,000-square-foot footprint, allowing the facility to support power-intensive research labs, specialized production testing, and on-site compute servers.
- Relevance to AI Infrastructure: As power availability becomes a constraint across major U.S. data center markets, institutional investors are increasingly acquiring industrial assets with existing high-capacity electrical hookups to support AI workloads and hardware R&D.
Property History and Value Appreciation
The building has undergone a significant valuation increase over recent years following major infrastructure investments and long-term tenant stabilization:
VALUATION & LEASING TIMELINE
[2022] Property Upgraded with Expanded Electrical & Mechanical Infrastructure
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[Jan 2023] PSAI Realty Partners Acquires Vacant Asset for $31 Million
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[2024] Nvidia Signs 12-Year Single-Tenant Lease for R&D & Compute Testing
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[Sept 2026] Blackstone Acquires Asset for $99.6M ($742/sq. ft.)
Located approximately five minutes from Nvidia’s corporate headquarters campus, the site serves as a key operational lab supporting hardware development and testing.
Alignment with Blackstone’s Digital Infrastructure Strategy
The acquisition aligns with Blackstone’s global investment strategy, which prioritizes digital infrastructure, data centers, energy assets, and properties supporting the expansion of artificial intelligence technology.
By securing a fully leased asset backed by a credit-rated tenant and significant power capacity, Blackstone secures predictable long-term cash flows while expanding its footprint in mission-critical Silicon Valley real estate.
