An unexpected nine-figure offer from a foreign investor has touched off a bidding war for AI chipmaker Nvidia's 550K SF headquarters complex in Santa Clara, a seven-building campus that includes data centers.
The owner, Los Angeles-based Preylock Holdings, has tapped Newmark to represent the property-which comes with 2M SF of development rights-in a potential sale that may be valued as much as $400M.
Steve Golubchik, Newmark's executive vice chair, told the San Francisco Standard that the sellers have received multiple inquiries from other interested parties.
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Nvidia's is the sole tenant of the campus, with a long-term lease. The unique combination of assets at the complex, including data centers, advanced manufacturing and lab facilities make the property an attractive offering, Golubchik said.
He also cited the not-for-profit electric utility, Silicon Valley Power, owned and operated by the City of Santa Clara, which can set its own electricity prices. Data processing using AI chips requires at least five times the power consumption of standard services.
The Newmark vice chair said whoever buys the property, which is located at 2701 San Tomas Expressway, also will gain possession of about 2M SF of future development rights.
Last month, Preylock secured a $181M refinancing of Nvidia's HQ complex. JPMorgan Chase provided a $130M senior mortgage and a $50.5M mezzanine loan backed by the office and lab campus. The five-year senior loan has a fixed interest rate of 6.88%, according to a report from KBRA.
Preylock used the new debt, plus about $9M in equity, to pay off a $167M loan from Natixis and to fund tenant improvements. Prelock bought the campus for $109M in 2017 and has worked with Nvidia to build out the lab space.
Nvidia has been rapidly expanding its footprint in the area as the demand for generative AI has exploded, pushing the market cap of the chipmaker up to more than $1.7T.
Nvidia constructed two buildings, encompassing 1.2M SF of office space, that are located near the HQ but are not part of the listing. The company named the buildings Voyager and Endeavor, an homage to space vessels in Star Trek.
Nvidia's space needs are expanding despite a flexible "work-from-anywhere" policy for its workforce, according to the Standard.
While the identity of the foreign investor who sparked the bidding war for the Nvidia HQ complex has not been disclosed, the newspaper noted that the Bay Area is a magnet for FDI, particularly from Asia due to its proximity to the market.
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