Digital Realty Pays $92M for 5 SAVVIS Centers

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Hardly a day goes by nowadays without news from Digital Realty Trust, which announced today that it had an agreement to acquire five California properties that are fully leased to web host SAVVIS Communications. DRT will pay $92.5 million for the facilities, which span 560,000 square feet of space and include three data centers and an office in Santa Clara and a fourth data center in El Segundo. That prices the deal at about $165 per square foot.

DuPont Fabros Development paid $52 million to buy the five former Exodus properties from SAVVIS in February 2004 after SAVVIS won a bankruptcy auction for the operations of Cable & Wireless America (which had bought Exodus in an earlier bankruptcy auction in 2002). DuPont Fabros will thus gain $40.5 million on the sale after about 16 months of ownership. The sale is subject to the completion of due diligence, and is expected to be funded with borrowings from DRT’s revolving credit facility.


Digital Realty also said that its Digital Concord Center LLC subsidiary will purchase a data center in Englewood, Colorado from a subsidiary of Global Innovation Partners. DRT will pay $16.5 million for the 82,000 square foot data center, which is occupied by Ameriquest Mortgage. GI Partners bought the then-vacant property in late 2002, with reports placing the purchase price around $12 million. The facility was built by Relera, a Denver-based managed hosting provider that overexpanded and went through $300 million in venture funding in 2000-2001.

Given the historic ties between GI Partners and Digital Realty – a real estate investment trust formed through an Initial Public Offering of 22 properties from GI Partners’ investment portfolio – the press release noted that the sale price was “less than the value determined by Cushman & Wakefield, an independent third party appraiser retained in connection with the acquisition.” The purchase price will be paid in cash at closing, which is expected within a week.

About the Author

Rich Miller is the founder and editor-in-chief of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.