2011 Data Center Summary

Issues Most Impacting Data Centers During 2011

  • Reid McConnell Tax Act increased the number of companies spending their own capital to build out space as an alternative to turn-key data center solutions.
  • Due to increased competition,wholesale pricing is flat on a national basis. Downward pressure on pricing is more likely operator specific than market specific.
  • The increased number of developers / operators has provided additional models. Increased flexibility by developers provides tenants greater opportunities to build their desired density. Furthermore,overly dense models (200 watts/sf) will take longer to lease up in certain markets (e.g.,  Chicago,New York).
  • Wholesale speculative construction costs are down between 15-20 percent due to economies of scale and off-site modular construction.
  • Significant uptick in leasing activity between 400 kW and 600 kW users. This has further blurred the lines between wholesale &colocation.

Strongest Markets For Wholesale Leasing Activity During 2011

  • Santa Clara
  • Suburban Chicago

Largest Wholesale Turn Key Transactions Leases Year To Date

  • Zynga                           9 MW           Santa Clara,CA
  • Twitter                          8 MW           Atlanta,GA
  • RackSpace                   7.9 MW           Elk Grove Village,IL
  • Telx                              6 MW           Santa Clara,CA
  • Savvis                        4.5 MW           Santa Clara,CA
  • Equinix                        4.5 MW           Seattle,WA
  • Softlayer                     3.4 MW           Santa Clara,CA
  • Server Central                 3 MW           Elk Grove Village,IL
  • Salesforce                   2.6 MW           Elk Grove Village,IL
  • Apple                        2.28 MW           Santa Clara,CA
  • Salesforce                2.275 MW           Ashburn,VA

Largest Build To Suits/Power Based Building (PBB)

  • Facebook,Phs II         300,000 sf        Forest City,NC
  • Time Warner              178,000 sf        Charlotte,NC
  • Chevron                   150,000 sf        San Antonio,TX
  • Boeing                     133,000 sf        Quincy,WA
  • Amazon                   120,000 sf        Boardman,OR
  • Disney                     100,000 sf        Kings Mountain,NC
  • Adobe                      100,000 sf        Hillsboro,OR
  • Equinix                      77,000 sf        Ashburn,VA
  • NetApp                      55,000 sf        Hillsboro,OR
  • Umpqua Bank             41,800 sf        Hillsboro,OR
  • Walgreens (PBB)              4 MW        Northlake,IL

Largest Blocks of Wholesale Space Available For Immediate Occupancy

  • CyrusOne                        60,000 sf (20 MW)        Houston,TX
  • CyrusOne                        41,000 sf (20 MW)        Austin,TX
  • DuPont Fabros               44,000 sf (14.1 MW)        Santa Clara,CA
  • DuPont Fabros                  60,000 sf (12 MW)        Piscataway,NJ
  • DuPont Fabros                  60,000 sf (12 MW)        Ashburn,VA
  • Powerloft                           50,000 sf (9 MW)        Manassas,VA
  • CoreSite                         45,715 sf (8.5 MW)        Santa Clara,CA
  • Benaroya                       50,000 sf (7.5 MW)        Puyallup,WA
  • DuPont  Fabros               31,900 sf (5.3 MW)        Elk Grove Village,IL
  • T5                                  54,319 sf (6 MW)        Atlanta,GA
  • Quality Technology            50,000 sf (5 MW)        Atlanta,GA
  • Digital Realty Trust          28,254 sf (3.8 MW)        Chandler,AZ
  • Sentinel                          20,000 sf (3.5 MW)        Somerset,NJ
  • CyrusOne                        25,000 sf (2.2 MW)        Dallas,TX

Largest New Wholesale/Colocation Facilities Announced During 2011

  • CyrusOne                          TBD (110 MW)        Phoenix,AZ
  • Sabey                                        40 MW        Manhattan,NY
  • i/o (PBB)                   831,000 sf (30 MW)        Edison,NJ
  • Telx                           215,000 sf (28 MW)        Clifton,NJ
  • T5                          206,000 sf (16.65MW)        El Segundo,CA
  • RagingWire                70,000 sf (14.4 MW)        Ashburn,VA
  • Latisys                         82,000 sf (14 MW)        Englewood,CO
  • Data Gryd                 120,000 sf (12.5 MW)        Manhattan,NY
  • T5                           150,000 sf (10.5 MW)        Dallas,TX
  • Equinix (PBB)              125,000 sf (10 MW)        Ashburn,VA
  • Fortune                     240,000 sf (7.8 MW)        Hillsboro,OR
  • Savvis                            70,000 sf (6 MW)        Piscataway,NJ
  • XO Comm. (PBB)              49,000 sf (3 MW)        Manhattan,NY
  • CyrusOne                                  45,000 sf        Dallas,TX
  • Terremark                                 30,000 sf        Santa Clara,CA
  • Sabey                                              TBD        Ashburn,VA

2011 Investment Activity

  • Verizon purchased Terremark for $1.4 B.
  • Hines Global REIT purchased Fisher Plaza for $160 M. It is an office,data center and retail campus.DLR bought a 69,000-square-foot SunGard facility in Rancho Cordova,CA for $30 M or a 9 percent capitalization rate.
  • Carter Validus purchased a single tenant leased data center in Richardson,TX for $28.9 M or a 8.5 percent capitalization rate.
  • In a distressed 100,000-square-foot sale,601 W. Polk Street in Chicago sold to Pi Data Holdings for $10 M.
  • Carter Validus is under contract to purchase 180 Peachtree in Atlanta,GA for $94.75 M. The 338,000-square-foot property is expected to close at an 8.2 percent capitalization rate.
  • Sabey purchased 375 Pearl  St. in for $120 M.
  • DLR purchased the Red Sea Portfolio (AT&T -900 Dorothy,Richardson,TX and Verizon -2950 Zanker,San Jose,CA)  for $50.3 M.
  • CyrusOne purchased its leased facility at 5150 Westway Park Blvd.,Houston,TX.
  • There were three power based shells that sold this year.
Due to the confidential nature of this business,it is virtually impossible to reflect the accuracy of  all the aforementioned information,but it is from sources deemed reliable.
For the largest wholesale transactions,the numbers set forth represent what is believed to be the total commitment of the lease agreement. The build-to-suit/new wholesale transaction size by and large part represents the total size of the shell not necessarily the technical space. This is further complicated by the multiple phases of the projects and/or the total power committed to the project versus initial build out.

4 comments to 2011 Data Center Summary

Leave a Reply

  

  

  

You can use these HTML tags

<a href=""title=""><abbr title=""><acronym title=""><b><blockquote cite=""><cite><code><del datetime=""><em><i><q cite=""><strike><strong>