Digital Realty Acquires AboveNet Centers
October 2nd, 2006 By: Rich Miller
Digital Realty Trust, Inc. (DLR) has acquired the East Coast data center business of AboveNet Inc., buying three facilities for $40 million. The deal includes the purchase of one property in Reston, Virginia and leases in New York City (at 111 Eighth Avenue) and Vienna, Virginia. The acquired sites include 120,000 square feet of data center facilities in three buildings, including 58,000 square feet of finished “turn-key” data center space. Customers using the facilities will continue to receive services from AboveNet, with Digital Realty as their new landlord.
“The addition to our portfolio of these outstanding datacenter facilities in New York City and Northern Virginia expands our footprint in two key markets, which are experiencing very strong demand for datacenter space,” said Michael F. Foust, Chief Executive Officer of Digital Realty Trust. “As a result of this transaction, Digital Realty Trust now operates on behalf of its customers over 500,000 square feet of datacenter space.”
The AboveNet name has a long pedigree in the data center business, as the original company built a national network of premier facilities during the dot-com boom. AboveNet was then acquired by Metromedia Fiber Networks (MFN), which filed for bankruptcy in May 2002. During its chapter 11 proceeding, MFN sold data center facilities representing more than 600,000 square feet of space and $400 million in investment, including sites initially developed by AboveNet that are now operated by 365 Main, Dupont Fabros and Sabey Corp. In September 2003 AboveNet emerged from bankruptcy focused on the metro connectivity market.
The largest of the sites acquired by Digital Realty is an 83,137 square foot leased data center facility at 111 8th Avenue, one of the major carrier hotels in New York City. The facility includes 35,463 square feet of finished space. A second leased site is located at 8100 Boone Boulevard in Vienna, Va. and has a total square footage of 17,015 square feet, with 10,935 square feet of turn-key data center space that will be operated by Digital Realty Trust.
Digital Realty also bought the building and underlying real estate at 1807 Michael Faraday Court in Reston, a 19,237 square foot facility containing 11,541 square feet of finished data center space. DRT is acquiring the improvements at all three sites.
“We look forward to working with each of the customers in 111 8th Avenue, 1807 Michael Faraday Court and 8100 Boone Boulevard to ensure that their needs are met during this transition process and going forward,” said Foust. “Digital Realty Trust strives to be a true partner to each of our customers, by working diligently to support their technical needs and business goals not only today but also over the long-term as those needs and goals evolve.” Digital Realty Trust and AboveNet said they have developed a transition plan to ensure that customers experience no interruption in service.
“This news is very positive for our customers in 111 8th Avenue, 1807 Michael Faraday Court and 8100 Boone Boulevard because Digital Realty Trust has such a strong reputation for operational excellence, its focus on customer service and its commitment to investing in the properties it owns,” said Bill LaPerch, President and CEO of AboveNet. “Customers will have two great companies working together to meet their needs: Customers will continue to work with AboveNet to meet their IP network services needs, and they will work with Digital Realty Trust’s world-class operations team for datacenter colocation services to customers in these facilities, including space, cabinets, power, and cross-connects.”
AboveNet provides fiber connectivity for businesses in and between 14 top U.S. metro markets and London. AboveNet is widely used in financial services, where the majority of top investment banks and 5 of the top 10 U.S. banks rely on AboveNet for mission critical services.
Digital Realty Trust, Inc. is a real estate investment trust that is among the largest owners of data centers and Internet gateways. Digital Realty Trust’s 54 properties comprising approximately 10.8 million rentable square feet, including 1.4 million square feet of space held for redevelopment.