Microsoft acquires nearly 300 acres for data center growth in El Mirage
Tech giant Microsoft Corp. (Nasdaq: MSFT) has acquired a major site in the West Valley to support its data center expansion in metro Phoenix.
Microsoft paid $258 million in all cash on May 31 for approximately 283 acres in El Mirage along Northern Parkway and Dysart Road. Nevada-based Dermody Properties was the seller.
The company bought the site across two sales: $130 million for 143 acres and $128 million for 140 acres, according to Maricopa County records and Tempe-based real estate database Vizzda.
This will add to 150 acres Microsoft already owns north of the site in El Mirage for its existing data center project at the 1,400-acre LogistiCenter at Copperwing industrial complex that’s being developed by Nevada-based Dermody Properties. A second facility at the complex is in final permitting stages, according to city of El Mirage documents. El Mirage City Council approved a site plan amendment for a third 245,000-square-foot data center building on that site in April.
Microsoft purchased the additional property in El Mirage to support data center construction that’s already underway in the area, said Bowen Wallace, corporate vice president for Microsoft Datacenters and Americas, in an emailed statement.
In May, Dermody received city approvals from El Mirage for a development agreement for three data center buildings totaling 750,000 square feet on the same site acquired by Microsoft. The 750,000 square feet of data centers is expected to replace plans for 2 million square feet of warehouse space, city of El Mirage documents said.
Dermody declined to comment for this story.
Microsoft is also working on expanding its $1.5 billion, five-building data center campus across 300 acres in Goodyear. The company last year agreed to invest $40 million in Goodyear’s water utilities for more wastewater capacity for its campus.
Microsoft also owns a nearly 150-acre site it purchased in 2019 near Citrus and Indian School roads in Goodyear.
Dermody in 2023 started construction on the first phase of LogistiCenter at Copperwing, including two speculative industrial buildings totaling 566,000 square feet. Those were expected to deliver this year.
The park, one of the largest currently being developed in Arizona, features companies such as Avanti Windows and Doors and Arcadia Cold Storage and Logistics.
Last year, the city of El Mirage also approved a site plan for a new Compass Datacenters project across 120 acres in LogistiCenter. The project is expected to include three 208,000-square-foot buildings at El Mirage Road and Peoria Avenue.
Data center growth has sped up in the Valley as other markets run out of land but some projects could be put on hold as utilities work to catch up with infrastructure.
Data center giant QTS Realty Trust is in the process of developing a 3 million-square-foot campus in the Glendale area across 400 acres with 16 buildings, the Business Journal reported. Denver-based Tract had also proposed a master-planned data center campus but changed its plans after receiving pushback from neighboring cities in the West Valley.
The Valley at the end of 2023 had a 2.2% vacancy, or about 156,556 square feet of available inventory for data centers, according to JLL research.