California-based Menlo Equities is planning a 1M SF campus in the booming Phoenix data center market.

The proposed East Thistle Data Center project would see five buildings, each totaling around 207K SF, constructed on around 40 acres in southeast Phoenix’s Ahwatukee neighborhood. First reported by the Phoenix Business Journal, the project includes both data centers and office space for “research and development,” according to planning documents. A 2-acre community park would also be included on the site.

The project would replace a largely vacant office park that has stood on the site since 1998. A call center operates on the property, but the parcel’s four single-story office buildings are mostly unused, according to the Phoenix Business Journal. Menlo Equities acquired the site in 2015 in a pair of transactions totaling $52.75M.

Zoning changes will be needed for the project to move forward. The developer’s application already received approval from the Ahwatukee Foothills Village Planning Committee in late January but still needs signoff from city planning officials and the Phoenix City Council, according to the Phoenix Business Journal.

This isn't the first foray into Phoenix for Menlo Equities, which owns two other office and call center properties in the area. Nor is it the Silicon Valley CRE firm’s first dip into data centers. The company owns 19 data center facilities across the U.S., according to its website. In 2021, Menlo Equities acquired 10 data centers from Digital Realty in a deal valued at $581M.

The firm’s Ahwatukee project is the latest addition to the Phoenix area’s growing pipeline of data center development, a building boom that has made the region one of the country’s fastest-growing digital infrastructure hubs. Tech giants like Amazon Web Services and Google, along with major third-party data center firms like EdgeCore, Prime, EdgeConneX, CyrusOne and H5, have announced new projects or significant expansions in the market in the past year.

That activity seems unlikely to slow. In the nearby suburb of Mesa alone, developers reportedly have 15 new data center projects in the pipeline.