Posted By Rich Miller On April 7, 2009 @ 4:31 pm In Research Triangle | 3 Comments
In recent months there’s been much discussion of the merit of sale/leaseback agreements, in which providers who own their data center sell the building to a third party and then lease space and remain as a tenant. Sale/leaseback transactions generate cash for the former owner (now the tenant), and provides the new owner steady rent from the lease. A number of data center companies are focusing on sale/leaseback opportunities, including CRG West  and T5 Partners.
Against that backdrop, here’s an example of a company going the other direction: NetApp (NTAP) has paid $119 million to buy two data centers it was leasing from BNP Paribas Lending Group. Back in 2007, NetApp signed an agreement in which it leased property in North Carolina and California to BNP, which then provided funding for NetApp to build data centers at the sites. NetApp has instead terminated the leases in Research Triangle Park and Sunnyvale, Calif., paid the outstanding balances on the lease deal, and regained title to the two facilities.
The transaction was disclosed in an SEC filing  and first reported by the Triangle Business Journal . The RTP lease had been for $61 million, while the Sunnyvale deal was for $58.3 million. NetApp said it did not pay any early termination penalties.
NetApp said the unwinding of the BNP lease was motivated by its desire to “manage its capital structure in light of the current economic environment.” The company said the move will save it $109.2 million in lease payments between January 2009 and August 2014.
Article printed from Data Center Knowledge: http://www.datacenterknowledge.com
URL to article: http://www.datacenterknowledge.com/archives/2009/04/07/netapp-ditches-lease-buys-data-centers/
URLs in this post:
 CRG West: http://www.datacenterknowledge.com/archives/2008/06/11/crg-west-offers-build-to-suit-services/
 SEC filing: http://idea.sec.gov/Archives/edgar/data/1002047/000095013409007029/f52056e8vk.htm
 Triangle Business Journal: http://www.bizjournals.com/triangle/stories/2009/04/06/daily19.html
 Rich Miller: http://www.datacenterknowledge.com/archives/author/richm/
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