Institutional lenders and investors are zeroing in on Bay Area industrial buildings with heavy electrical capacity, treating power availability as a necessity for a changing tenant base. 

As artificial intelligence and robotics firms hunt for facilities that can deliver large amounts of energy, the region’s limited inventory of power‑ready space has become one of the most coveted corners of the industrial market.

“The scarcest resource is amps, not space,” said Alex Horn, managing partner with BridgeInvest, a Miami-based specialized investment manager that targets middle-market CRE loans between $10M and $150M. 

BridgeInvest in July closed a $53.2M loan to Sterling Organization to reposition a former Fry’s Electronics building in Fremont into a Class-A industrial facility with 4,000 amps of power scalable to 8,000 amps. The loan also covers a smaller industrial property in San Francisco’s Nob Hill neighborhood.

“Finding real estate we can lend upon that has high power and really fits the mold of what new-generation AI and robotics companies need is a strong position for us as a lender,” Horn added.

JLL is tracking about 9.5M SF of active industrial demand in the Bay Area from tenants seeking at least 4,000 amps of power, said Alexander Quinn, senior director of economic research for JLL’s northwest region. 

Demand for high-power facilities in the Interstate 880 manufacturing corridor of the East Bay totaled 3.8M SF in the second quarter of 2026, with another 2.9M SF in Silicon Valley, researchers at JLL noted.

Tenant demand for power-ready industrial buildings is expected to be a primary driver of rental growth and boost leasing activity among buildings capable of accommodating advanced manufacturing tenants, according to JLL. 

It’s also kicking off a wave of speculative industrial construction — the development pipeline in Silicon Valley stands at 1.9M SF of spec space, with another 700K SF under development or renovation in Oakland.

That demand is the primary investment thesis for BridgeInvest, which has closed five loans in the past six months totaling around $180M for power-heavy AI generation manufacturing assets in the Bay Area, Horn said. 

The private lender is also working to close its largest-ever deal for a purpose-built research and development facility in San Francisco that was designed specifically for large physical AI demand by advanced manufacturing lab users.

“Power is the new oil,” Horn said. “We have tremendous conviction in this thesis of high-power, AI-adjacent usage. Everybody in our space is chasing data centers. We’re financing factories and labs that are benefiting from the same boom but with half the competition.”

BridgeInvest’s loan to Sterling Organization is the West Palm Beach private equity firm’s latest play to reposition two industrial assets. Sterling Organization in September 2024 purchased the 144K SF big-box retail property on 11.2 acres off Osgood Road in Fremont for $35.7M and is working through more than $10M in improvements to overhaul the building.

Sterling Organization has already purchased the switchgear necessary to bring 8,000 amps into the building to avoid the long lead times associated with acquiring heavy-duty electrical equipment, which can have delivery times of 12-18 months from ordering. If a tenant requires 8,000 amps, bringing the building in Fremont to that standard is truncated, Horn said. 

Sterling Organization also has a 38K SF building at the corners of Bush and Larkin streets in San Francisco that already has 4,000 amps of live power.

“You can't replicate that in the city today,” Horn said. “It's one of the highest-powered small-footprint buildings in that market, and that was super attractive to us because it is the right mix of what AI tenants want.”

Advanced manufacturing companies flourishing in the Bay Area desire to locate their growing robotics and manufacturing operations in Silicon Valley to be in proximity to corporate headquarters and a large pool of talent, but the Bay Area is quickly becoming a power-constrained market, said Gary Baragona, vice president of research at Kidder Mathews. 

As physical AI and robotics industries mature, the Bay Area may lose out to competing markets that can more readily accommodate large power users in terms of space and power, he added.

“Companies are going to need to do their due diligence to see what makes sense,” Baragona said. “For a smaller facility, potentially conversions make sense. With larger facilities, it's going to be more difficult to convert (to 4,000 amps), and sometimes it's better to look at new product.”

Silicon Valley’s long history as a high-quality R&D and pilot production market means there still are many buildings with high-power capabilities, JLL’s Quinn said. Manufacturing sites in the East Bay would have power infrastructure in place, as do previous military bases such as Naval Air Station Alameda. Historically undervalued assets could see a rebirth in the new advanced manufacturing revolution expanding in the Bay Area, Quinn said. 

“The AI boom is growing, and it needs somewhere to build,” Horn added. “It needs power-capable industrial to do it, and that's why we like lending in that asset class.”