Data Centers Key to Lehman Sale to Barclays
What assets remain solid when the value of nearly all other financial assets are called into question? Data centers.
Lehman Brothers’ real estate, including two data centers, proved central to a deal yesterday in which Barclays agreed to pay $1.75 billion to acquire most of Lehman’s North American operations. The data centers and Lehman’s headquarters building accounted for $1.5 billion of the deal’s value, with the British bank paying just $250 million in cash for Lehman’s North American investment banking and capital markets businesses.
The Lehman sale provides echoes of the March deal in which JPMorgan bought the assets of Bear Stearns, in which Bear’s two data centers and headquarters building accounted for much of the value of the $270 million sale price.
Lehman’s primary data center is located in 140,000 square feet of space in a 40-story tower in Jersey City, New Jersey, across the Hudson from Manhattan. The Jersey City data center became the hub of the company’s network after its primary data center in World Trade Center Tower One was destroyed in the Sept. 11 terrorist attacks. In November 2001, Network World highlighted the company’s extraordinary efforts to rebuild its IT operations in the Jersey City site.
The transition left Lehman in need of a backup facility for disaster recovery purposes. In December, 2001 Lehman Brothers signed a 15-year lease with Level 3 for 65,000 square feet of space in one of its New York data centers.
Not all of Lehman Brothers’ real estate investments turned out as well as its data center projects. The New York Times reports that the company’s investments in apartment buildings and warehouses were a significant issue in the firm’s downfall.
[...] much is a data center worth? Sep.17, 2008 in News Both Data Center Knowledge and Slashdot report that two data centers were an important part of the deal between the Lehman [...]
[...] Pare che il prezzo pagato per rilevare prestigiosi istituti finanziari in bancarotta sia giustificabile con il solo valore dei data centre di proprietà. Eh il mattone… [...]
[...] centers. When assets of bankrupt Lehman Brothers were sold to Barclays Tuesday for $1.75 billion, Lehman’s data centers and headquarters accounted for $1.5 billion of the value in the deal. That echoes the JPMorgan-Bear [...]
I think you need to do your homework a little further on which of the data centers were acquired and how much they actually cost.
[...] Centers Crucial To Lehman Sale Great article regarding the what Barclays really gained by picking through the carcass of Lehman. Summary below [...]
[...] this is pretty much the most valuable part of the remaining carcass.Datacenter Knowledge writes in “Data Centers Key to Lehman Sale to Barclays:Lehman Brothers
the difficult thing is the headquarters itself is in Manhattan — those holdings could be worth a billion and change as such
[...] The whole piece is here. [...]
Cheap Computer Monitors » Blog Archive » Barclays eyes up Lehman Brothers for its assets, I mean, data centresPosted September 18th, 2008
[...] It’s about data centres. Yes, data centres. You may have noticed we at The Times have become very interested in them recently. What assets remain solid when the value of nearly all other financial assets are called into question? Data centers. [...]
[...] usually invisible industry. Also, how ironic that one of the main assets are real estate holdings. More… [...]
info tech guyPosted September 22nd, 2008
Hmmm. Interesting that Bear Stearns & Lehman actually elicited buyer interest, in part, because that had NOT outsourced their datacenters. If they’d followed the model advocated by many on Wall Street to outsource (usually offshore) all possible work, they wouldn’t have datacenters . Ironic isn’t it?
[...] article from Data Centre Knowledge and this one from Vunet highlight the actual amounts paid for Lehman’s businesses ($250m) [...]
I’d be interested to know how they actually valued the data centers – if it is (partially) based on what is in the asset register – they’re going to be a *long* way out. Our experience is that the asset register for large data centers can miss 10-50% of the actual assets (hardware and software).
Strikes me as a great business case for understanding what you have in your data center!