You could do a simple k-d tree implementation on the server side to store the coordinates.
Send the coordinates of the device over, which can be determined at whatever interval you need. If it's every 5 seconds, or 10 seconds it doesn't really matter. This will mainly be decided by the minimum distance between each of the coordinates/radius. If they're closer, you may need to update it more frequently.
Using the k-d tree finding the nearest neighbor would be O(log(n)). However, you make a slight modification where you can start adding the nodes to a list as long as they are within the certain radius of your device coordinates. In fact if you store it locally as a k-d tree as well then you can pick the furthest nodes in O(log(n))
Now on the second update when the device location is sent again, you can quickly update it since you have the existing locations. Say you move in the x direction by 5. You can drop the points that are now outside of the radius at x - 5. The new proximity, you do the same nearest neighbor search, adding in nodes as they're within the radius, but this time starting with the cached nodes closest to the direction you are moving in.
Combining that with an interval tree for radiuses. So say 0 to 1, 1 to 2, 2 to 3, as your intervals. You can pick out everything within a certain radius in O(log(n)) time as well. Those should be pointers to nodes in the k-d tree. That would simplify the radius calculations and finding the location if you're willing to sacrifice some memory for efficiency.