Amazon’s deal to snap up a research and office property near Los Angeles is the tech giant's latest move as it aggressively expands its data center foothold across the country through acquisitions and development — not just leases.
Amazon Web Services shelled out more than $78 million for a 164,000-square-foot space at 2964 Bradley St. in Pasadena. The 8-acre site was once a data center for telecommunications firm EarthLink before being redeveloped.
The company is expected to use the site to power its cloud business lines, but it could also tap some of the property for offices depending on how its acquisition strategy plays out nationally, real estate professionals tell CoStar News. Amazon didn’t comment.
The purchase lands as Amazon accelerates data center development across the country, adding more than 3.8 gigawatts of capacity over the past year and looking for power-rich pockets in Southern California where such large-scale projects can plug in quickly. It’s expecting another gigawatt to come online by the end of the year, an addition equivalent to powering roughly 750,000 homes simultaneously.
The deal also comes just weeks after Amazon paid $700 million for 188 acres in Prince William County, Virginia, for future data center expansion at Devlin Technology Park.
“Amazon appears to have slowed leasing activity and shifted toward ground-up development and property acquisitions to grow its local footprint,” said Jesse Gundersheim, CoStar’s senior director of market analytics for Los Angeles.
The need for cloud computing support systems is expanding rapidly, with North American data center vacancy falling to a record 2.3 percent even as total inventory reached an unprecedented capacity to handle 15.5 gigawatts, according to JLL.
Amazon’s data center push
The Pasadena purchase signals a shift for Amazon.
The company leased three Inland Empire buildings of more than 1 million square feet each in 2024 but has not signed any major industrial or flex leases in Southern California this year, Gundersheim said.
“The Pasadena building likely represented a unique opportunity for Amazon Web Services, which has purchased at least 20 properties nationwide over the past two years for a combined $2.5 billion, most of it raw land for development,” Gundersheim said.
The deals signal how Amazon is pivoting toward owning critical data center real estate in areas with available power rather than relying on third-party landlords.
Pasadena has its own water and power department, freeing up both for artificial intelligence. The city is also home to the California Institute of Technology, which is heavily invested in AI and quantum research, with Amazon opening a 21,000-square-foot facility on campus called the AWS Center for Quantum Computing in 2021.
“We have a top-10 university on the planet in Caltech in Pasadena, and Caltech is extremely focused on AI and deep quantum,” said JLL Vice President Hunter Brown, who lives and works in Pasadena. “When you have Caltech in your city, it’s a natural magnet for big companies to come knock on the door.”
Pasadena also has a legacy of hosting data centers, including former EarthLink facilities and a Tetra Tech building that previously served as a data center.
Amazon’s purchase price in Pasadena is more than double what the property previously brought in a 2021 sale to Alvarez & Marsal. The deal equates to $480 per square foot.
Such facilities are used by Amazon’s cloud division — Amazon Web Services — to deliver computing power, storage and databases on demand to clients that don’t want to own their own physical data centers.
Apparel retailer Max Studios occupies roughly half the building through 2027, while French aerospace firm Thales was the most recent tenant in the balance, giving Amazon flexibility to plan for conversion.
Pasadena’s tech gravity
Pasadena has emerged as one of Southern California’s most durable tech clusters, anchored by Caltech and NASA’s Jet Propulsion Laboratory. Their presence draws companies working in AI, aerospace, robotics and advanced manufacturing.
The city’s Hastings Ranch district in northeast Pasadena has become a magnet for corporate innovation centers, including those for General Motors, BYD and Tetra Tech. Brown represented GM in acquiring a 151,000-square-foot campus there in 2021 for its Advanced Design and Technology Center. The company chose the site because of its access to power and other tech users.
“These are amazing companies and they happen to be in the same pocket. All the math is kind of lining up to this fun R&D flex culture,” Brown said.
Local utilities are another differentiator. Pasadena Water and Power provides roughly 1,000 gigawatt hours of electricity annually and is planning capacity increases by 2031, while the city’s control of its water supply could be helpful because data centers require cooling.
“The conversation is just a lot easier if you need more power in Pasadena. It’s a lot more seamless than if you have to go through municipalities and red tape,” Brown said. The structure mirrors the municipal grid in the nearby municipality of Vernon, an area that has attracted industrial tenants that use large amounts of power.