Data center REIT Digital Realty closed on the $48.8M purchase of a roughly 235K SF property in Vernon where it plans to build a data center.

The seller of the 5.4-acre site was Pacific Santa Fe Industrial, an LLC linked to 4D Development and Investments founder David Pourbaba.

The property at 4400 Pacific Blvd. is across the street from another under-construction data center, according to a news release from The Klabin Co. Prime Data Centers is building that property, a spokesperson for the brokers said.

Vernon has been a hub for data centers because of its power utility structure, which allows it to offer cheaper power than many other localities around Los Angeles.

Dallas-based Prime Data Centers has a 243K SF data center in Vernon that opened in November 2024, and in September 2024, data center developer CoreSite bought a 7-acre site in Vernon for $61.5M.

About a year ago, Digital Realty was working on a plan to replace a parking structure with a data center in Downtown Los Angeles, less than a block from One Wilshire. Digital Realty didn’t immediately respond to Bisnow’s request for comment about the Downtown project.

The Klabin Co.'s Frank Schulz, Zach Middleton and Max Farkas represented Digital Realty. Pacific Santa Fe Industrial was represented by David Brandt and Jake Poxon of Lee & Associates.

Although there are concerns in some corners of the investment world that there is a bubble around artificial intelligence that would negatively impact data centers, major users Amazon, Microsoft, Google and Meta are investing more, not less, in new data centers.

Capital expenditures from those so-called hyperscale users jumped more than 18% in the third quarter compared to the three months prior.