Equinix Buys DC Data Center for $53 Million
October 7th, 2005 By: Rich Miller
Equinix, Inc. will buy the Ashburn, Virginia technology campus that houses its flagship Washington, D.C. area data center for $53.0 million, the company said today. The 32.6 acre campus in the Dulles corridor includes 461,700 square feet in six buildings, three of which are occupied by Equinix. Two of those centers are built-out, while the third is available for expansion. The space at the campus is 95 percent leased, and Equinix said it will likely sell the properties it doesn’t occupy, and try to arrange sale-leaseback deals on its own facilities.
Equinix clearly likes the sale-leaseback model, which it is also pursuing with its newly-acquired Los Angelese-area data center in El Segundo. A sale-leaseback option typically involves a property owner selling their building to a second party, while agreeing to continue to lease space in the building. The transaction generates cash for the former owner (now the tenant), and provides the new owner steady rent from the lease.
Equnix says it expects to close a sale-leaseback deal for its Los Angeles area data center within 30 days, ahead of its previously announced target of year-end. It bought the property for $34.5 million in September of this year and is currently in negotiations with multiple parties to sell the center for $36.0 to $40.0 million.
“With the announced sale of the Ashburn campus, we saw an opportunity to secure our flagship IBX center as well as to acquire contiguous expansion space to position ourselves for further growth in one of our strongest markets,” said Peter Van Camp, CEO of Equinix. “Given the tremendous interest we have received in the planned sale-leaseback of our recently acquired Los Angeles area center, we are confident there is a great opportunity to obtain attractive long-term financing for this strategic Washington, D.C. area property as well.”