Last year, tech giant Microsoft quietly bought a giant hunk of land in Goodyear for a then-unknown endeavor that has since come to light as a new data center location. Then, in November, the company continued to amp up its ties to the state with a cloud-computing research center project in partnership with the University of Arizona.
Now, piggybacking off both of those projects, and seeing the growing demand for cloud services in the west and the opportunity to grow its data center footprint in Arizona, Microsoft has announced a second large site in Goodyear meant to be home to another data center. The first land purchase, which sets up shop near the Phoenix Goodyear Airport, is seeing construction get underway as the ink dries on the new deal for the land it just purchased, which is located about 10 miles away.
“As part of our plans to support the growing demand for cloud and internet services in Arizona and across the Western United States, Microsoft recently purchased land at two locations in Goodyear, Arizona where we intend to develop world-class data center facilities,” the company said in a statement.
It doesn’t come as a surprise that Microsoft is attracted to Arizona. The Phoenix area is ranked as the second-most active data center market with new construction in the United States. This is evident as rows of warehouses are repurposed and land is bought for construction of new facilities, like Apple’s own data center development in East Mesa.
In 2018, Phoenix recorded a record-level 41.6 megawatts of net absorption, only coming in second behind Northern Virginia, which is contracted to be the site of the new Amazon HQ. According to a report put out last year by CBRE, data center developers bought up about 900 acres of land in metro Phoenix in the last two years, and this was before the new Microsoft acquisition.
“Companies with recognizable names making sizable investments in Goodyear and Arizona demonstrates the city’s and state’s ability to consistently support the needs of top tiered companies,” Lori Gary, Economic Development Director for Goodyear said. “Microsoft’s decision to locate in Goodyear provides additional employment opportunities for technology workers including those living in the community and the West Valley. One of Goodyear’s economic development focus areas is increasing the number of technology companies within the community. Microsoft’s presence brings additional visibility to Goodyear and Arizona as a viable location for technology companies.”
The first phase of development is already underway at Microsoft’s first data center building, which will land around a quarter-million square feet with about 3,000 square feet of office space. The second building will clock in around the same in overall space, but about 2,000 square feet of office space.
The first site, bought last August, sold for $48 million and the new deal follows closely behind at $37 million for 147 acres. Microsoft is advancing its cloud-computing region in the western U.S. and will see aggressive expansion with the new sites over the next few years. The company has a presence in Utah, Washington, and the Bay Area with other data center sites.
Goodyear, a town of about 80,000, is becoming a data center hub in its own right. In addition to Microsoft, Vantage Data Centers, a Santa Clara-based data center technology firm, with locations in Northern Virginia, is planning to build a new site in Goodyear next year, and Stream Data Centers will build its own just after that.
“Goodyear has many assets which are attractive to top companies including available land with strong infrastructure support,” Gary said. “Investments such as expanding the water and wastewater infrastructure, maintaining and building roadway networks, increasing recreational amenities, and ensuring strong public safety are assets which attract quality businesses to Goodyear.”