What do AT&T, The New York Times, and Boston Red Sox have in common? They all house servers in a massive Boston data center and carrier hotel owned and operated by a company called Markley Group.
Data center capacity in the building is about to get expanded, since Markley recently closed a massive financing package. The company raised $240 million from a syndicate of lenders led by TD Bank, which it said will finance data center expansion at its One Summer Street building in Boston and potentially other locations in New England.
The financing puts Markley in the position to explore its first expansion outside of its native Boston. “This new and robust financing package allows us to accelerate our growth and explore new projects in new markets,” the company’s CEO, Jeffrey Markley, said in a statement.
One Summer Street is one of the largest and oldest telco and data center buildings in the New England region. It houses supporting infrastructure and more than 250 companies’ IT equipment across nearly 1 million square feet of space. In addition to the companies listed above, NTT, British Telecom, Harvard, Massachusetts Institute of Technology, and the Boston Internet Exchange are also tenants.
Markley also uses the building to house servers that support its cloud services. Based on software by VMware, it offers on-demand Infrastructure-as-a-Service-style compute and storage with emphasis on integrating those elastic resources with customers’ dedicated infrastructure housed in the building.
While both debt and private-equity are available to service providers looking to finance data center expansion, the provider has to meet a list of basic requirements to get investors on board. Some of the most important requirements include having existing tenants with good credit standing and an experienced leadership team that has proven itself in the market.
Once financing is secured, there are multiple expansion options for a data center provider. They can build out new facilities from scratch, buy existing ones and remodel as necessary, or buy existing ones that already have one or multiple tenants.
