Digital Realty Buys Two Valley Properties
September 29th, 2009 By: Rich Miller
Digital Realty Trust (DLR) has acquired two data center properties in Silicon Valley, the company said today. The real estate investment trust paid $44 million to buy properties at 444 Toyama Drive in Sunnyvale, Calif. and 1525 Comstock Street in Santa Clara, Calif.
444 Toyama is an existing 42,000 square foot data center that is fully leased through mid-2022. Digital Realty didn’t identify the tenant, but colocation specialist Switch & Data says it operates a data center at that address.
Digital Realty also said it has acquired the ownership interest in 1525 Comstock Street from a joint venture partner. The company has owned an interest in the property since 2007. The 42,000 square feet building is part of Digital Realty’s Santa Clara campus, adjacent to its data centers at 1201 Comstock, 1100 Space Park and 1500 Space Park.
This spring Digital Realty built out 29,000 square feet of raised-floor space at 1525 Comstock as part of its Turn-Key Datacenter program, but has not yet announced a tenant. The property, which utilizes free cooling (using fresh air to cool the data center) is said to be a candidate for LEED certification.
Earlier this year Digital Realty’s management said the company was likely to buy a number of occupied data centersas income properties, which generate revenue through rent from existing tenants. The Toyama property fits into that plan, the company said.
“An important part of our strategy is to acquire income-producing assets at attractive yields as a compliment to our redevelopment program,” said Scott Peterson, Senior Vice President of Acquisitions for Digital Realty Trust. “Our acquisitions team continues to demonstrate its ability to source and capitalize on these opportunities, such as the Toyama Drive property, where we acquired a long-term, secure income stream at an accretive yield.”
Peterson said the deal to acquire full ownership of 1525 Comstock Street “is consistent with our strategy of remaining the long term owner and operator of the Turn-Key Datacenter facilities that we develop.”