The owner of a former Bear Stearns data center in New Jersey has begun seeking to lease the property after a $23 million power infrastructure upgrade at the facility, which now has 12 megawatts of capacity. Brookfield Real Estate Opportunity Fund, which bought the property last year, has hired Cushman & Wakefield to lease the 650,000 square foot campus in Whippany.
“This property has been the talk of the industry since its former Wall Street occupant set it up as an active data center operation and disaster recovery site,” said Sean Brady of Cushman & Wakefield’s East Rutherford, N.J. office. The five-building site has been rebranded as the Convergence technology campus. Two tenants currently use parts of the property for back office and business continuity operations. About 400,000 square feet of space is available immediately, including about 70,000 square feet of raised-floor data center space across several buildings, including a single block of 40,000 square feet.
Acquired and Later Sold by JP Morgan
When Bear Stearns was on the brink of failure in March 2008, JP Morgan bought most of the firm’s assets in a deal that was initally announced as a bargain-basement $236 million, but was later adjusted to about $1.2 billion. The assets included two Bear Stearns data centers, including one that was part of the Whippany campus.
Last year Brookfield Asset Management (BAM) acquired the Whippany site as part of a portfolio of 16 properties totaling about 2.9 million square feet being sold by J.P. Morgan Chase. The deal was structured primarily as a sale/leaseback , in which JP Morgan continued using the space as a tenant. But the Whippany property was the exception, being described by Brookfield as a "meaningful value-add" opportunity.
The Convergence site comes on the market in a competitive environment for data center space in New Jersey. That includes multiple colocation options in northern New Jersey and a growing number of options for wholesale data center space in central New Jersey, where some of the industry’s largest players are building new facilities.
Digital Realty Trust (DLR) has several buildings in Piscataway and Franklin Township with space available, while DuPont Fabros (DFT) just opened the first phase of its huge wholesale data center in Piscataway and Sentinel Data Centers has a new facility in Somerset. Meanwhile. i/o Data Centers has announced plans to build a large modular data center in central Jersey.
The Convergence site features uninterruptible power supply (UPS) units, multiple generators, strong connectivity and full-site security, according to Cushman & Wakefield’s Mission Critical Practice Group. The campus is located about 25 miles west of Manhattan, not far from the Morris Plains and Morristown train stations.
“We are pleased to offer regional tenants an opportunity to locate at Convergence, which fulfills a critical need in today’s corporate world,” said Brookfield Real Estate Opportunity Fund’s Michelle Berliner, vice president. The New York-based firm currently manages $1.3 billion of office, retail, industrial and multi-family assets.