The bulk of the additional $15 million will be used to expand capacity at Latisys’ 123,000 square foot data center campus in Ashburn, Virginia. In early 2011, Latisys added 14 megawatts of additional power and opened 26,000 square feet of new raised floor  space at the facility.

“Over the past several months, Latisys has strategically scaled its operations through acquisitions and facility expansion, while continuing to invest resources towards enhancing our managed hosting and soon-to-be released next generation cloud platform,” said Doug Butler, Chief Financial Officer for Latisys. “Increasing the credit facility further enables Latisys to pursue the tremendous business opportunities we are seeing in Greater Washington, DC and our other key markets, and bring innovative solutions to our customers.”

The credit facility is funded by the existing consortium of eight financial institutions, including RBC Capital Markets, TD Securities, Madison Capital Funding, Bank of America, CapitalSource, Caterpillar Financial Services Corp., GE Capital and SunTrust Robinson Humphrey.

Latisys was founded in 2007 as Managed Data Holdings (MDH) with backing from Catalyst Investors and Great Hill Partners. It has moved quickly to build a footprint in the managed hosting sector, acquiring three providers and quickly expanding its data center capacity.

An illustration of what the Latisys data center in Oak Brook, Ill. will look like upon completion.

Managed hosting provider Latisys will expand its Oak Brook, Ill., data center campus to meet a growing need for data center space in the greater Chicago market, the company said today. The expansion will provide an additional 10,000 square feet of high-density raised floor space and 2.5 megawatts of additional power, and be available to customers in June.

The expansion space will be built in a 48,000 square foot building adjacent to Latisys’ existing data center in Oak Brook. The property was acquired in August 2010, around the time that Latisys restructured its senior credit line to free up capital for data center expansion.

“With a relative absence of natural disasters, and geographic positioning as a major transportation and high speed connectivity hub, Chicago has become an optimal market for enterprises to deploy their IT infrastructure,” said Len Salva, Regional Sales Director, Latisys. “With this newly commissioned space, Latisys is positioned to meet a market need for high density power, space and cooling capacity, while our data center-as-a-service offering provides enterprises with the flexibility, reliability and scalability they need to succeed.”

Demand in the downtown Chicago market has remained strong in recent years, but the suburban market has had a different profile, with more supply available due to the completion of several large data centers built by Equinix and DuPont Fabros. In 2010 those providers leased much of their space, bringing supply back in line with demand.

In 2010 Latisys established an east coast presence with a new 123,000 square foot data center in Ashburn, Virginia, and completed significant facility expansions at existing facilities in Chicago, Denver and Irvine, California.

The server hall of a data center operated by CoreSite, which is expanding its data center space in northern Virginia.

Data center builders continue to bring new capacity online in the active northern Virginia market. Last week both CoreSite Realty and Latisys announced projects to expand their data center operations in Reston and Ashburn, respectively. The expansions are among a number of new projects will provide a welcome supply of data center space in a  market where demand continues to exceed supply.

In its fourth quarter earnings, CoreSite (COR) said that it has commenced construction on 52,286 square feet of  data center space at its 12100 Sunrise Valley Drive facility in Reston. The company said it will invest an estimated $30.5 million in the expansion, and expects to complete the space in phases during the second and third quarters of 2011.

The expansion space has an anchor tenant, managed hosting provider ServInt, which said last week that it has leased half a megawatt of capacity in the  expansion space.  “This significant expansion of our data center resources will help us ensure ample capacity for ongoing and future growth,” said ServInt CTO Matthew Loschert. “We selected CoreSite’s Reston facility for our expansion because it provides best-of-breed connectivity, energy efficiency, power redundancy and environmental sustainability. We consider it to be the best-positioned data center in Northern Virginia.”

Meanwhile, Latisys has announced a significant expansion to its Ashburn, Virginia data center campus that includes 14 megawatts of additional power and 26,000 square feet of new, available raised floor space. Latisys, which provides managed hosting and colocation services, says it is new space can scale to an average of 220 watts per square foot and also tie customer infrastructure seamlessly into the company’s disaster recovery solutions.

“We continue to see customers express the need to ensure built-in expansion capacity to meet their own internal growth while also retaining the flexibility to keep pace with the evolution of compute, storage and network technologies” said David Haskell, Washington, D.C. Regional Sales Director, Latisys. “By implementing high density power and cooling capacity, and delivering a flexible data center-as-a-service offering to enable larger private and public sector entities to meet evolving IT requirements, customers can eliminate scalability and reliability issues.”

The Latisys data center in Englewood, Colorado, one of four facilities the company operates

Data center providers continue to focus on electric power as they structure and price deals for data center and colocation space. As customers seek more flexible terms in acquiring current and future power capacity, providers are rolling out new programs to differentiate their offerings.

Among them is Latisys, which recently introduced Data Center as a Service, a program which offers many features of a wholesale data center lease, but is packaged as a service contract. The solution features a data center suite that provides access to space, power and cooling  and includes racks and cabinets, leaving the customer to populate the enclosures with their own servers, storage, and security gear. Customers who already own racks and cabinets can use them if they prefer.

While offering many characteristics of colocation, the offering is designed for customers seeking 250 kilowatts to 2 megawatts of IT load, who typically are ideal tenants for wholesale data center space. Power capacity continues to be a key selling point for customers seeking data center space, who are seeking the best way to pay for the power they need now, and reserve the power they’ll need down the road. Latisys says its approach may appeal to customers planning a gradual ramp-up in their power requirements.

Power Driving Deal Terms

“A centerpiece of our business is power strategy,” said Pete Stevenson, the CEO of Latysis. “Every company I’ve spoken to wants to have some flexibility in how they deploy. They all care about the growth path. Not everyone’s going to be a fit for a lease at a wholesale provider.”

Stevenson said the Data Center as a Service (DCaaS) program allows Latisys to offer more flexible terms than the triple net lease format preferred by real estate investment trusts, a category which includes three of the largest players in the wholesale data center market, Digital Realty Trust, DuPont Fabros Technology and CoreSite Realty. These wholesale providers lease finished data center space to their tenants.

“We let customers to think about their power requirements and scale up to meet them,” said Stevenson. “We’ll also give customers different ramps, letting them reserve space they have taken a certain period of time. We give them flexibility.” Stevenson said customers could have an option to of a graduated approach in which they add additional power capacity after six months or nine months.

Latisys will be offering the new program in its four data centers in Chicago, Denver, northern Virginia and Irvine, Calif.

The Latisys program comes on the heels of a move by QTS (Quality Technology Service) to structure deals that offer tenants flexible power purchasing, allowing tenants to  scale their power usage up and down over time. i/o Data Centers also offers a Data Center as a Service (DCaaS) solution offering a flexible range of colocation, support and modular data center space.

QTS and Latisys each offer both colocation and managed services,which allows them some flexibility in redeploying space and power. But as these providers seek to differentiate their plans, they are also benefiting from the growing customer appetite for wholesale turn-key space, a product type established and popularized by the public data center REITs.

“Leasing data center colocation space from a wholesaler can work for organizations with the financial and personnel resources to build out space themselves,” said Don Goodwin, Chief Revenue Officer, Latisys. “But we strongly believe our expanded Data Center-as-a-Service offering will resonate with businesses seeking to optimize their IT infrastructure management.”

Stevenson said customers are also seeking shorter lease terms, while REITs tend to favor longer leases. “The wholesale guys are looking at seven- and 10-year deals,” said Stevenson. “I love seven-to 10-year deals, but we also see a lot of three-year to five-year deals. Customers are beginning to realize they don’t have to worry about density, and they don’t have to sign a 10 year lease. We can take that and turn it into a monthly payment.”

The new Orange County 2 (OC2) facility will be supproted by an initial 10 megawatts of utility power, and is being designed to support an high-density server installations of up to 250 watts per square foot. The expansion will more than double the high-density raised-floor space available to Latisys customers in Orange County. Latisys says it expects to begin installing customers in OC2 in the second quarter of 2011.

Belief in the Orange County market
“Today’s expansion announcement reflects a sizable investment and commitment to Orange County enterprise customers, and builds further upon our belief that Latisys’ is the premier destination for customers that need or want to grow, yet can’t scale their own infrastructure in the Orange County market today,” said Peter Stevenson, the CEO of Latisys.

The expansion in Irvine, a city of 220,000 located south of Los Angeles, follows the recent announcement that Latisys has expanded its credit line to fund additional growth.

Latisys was founded in 2007 as Managed Data Holdings (MDH) with backing from Catalyst Investors and Great Hill Partners. It has moved quickly to build a footprint in the managed hosting sector.

The company recently established an east coast presence with a new 123,000 square foot data center in Ashburn, Virginia, and completed significant facility expansions at existing facilities in Chicago, Denver and Irvine, California.

“The new (OC2) facility, in tandem with a growing national footprint, reinforces Latisys’ flexible and agile approach to delivering IT infrastructure outsourcing services, and enhances our ability to serve existing and prospective customers in Orange County,” said Tom Panarisi, Regional Vice President for Latisys.

Some of the data center space inside the Latisys Chicago data center

Managed hosting provider Latisys has successfully refinanced its existing $65 million senior credit facility with a new $110 million credit line through a consortium of eight leading financial institutions.

Latisys said the funding will help the company continue its expand its facilities and services across key U.S. markets.

“The new capital enables Latisys to continue to scale our data center facility operations and services as one of the nation’s premier data center colocation and managed hosting providers,” said Doug Butler, Chief Financial Officer for Latisys. “The fact that our financing was heavily oversubscribed and includes the leading financial institutions for our sector is a testament to Latisys’ strong national platform of facilities in Irvine, Denver, Chicago and Ashburn, as well as the combined businesses’ profitability and prospects for continued growth.”

The new 5-year, $110 million credit facility consists of up to $85 million in term debt and a $25 million revolving credit facility. The refinancing, which also reduced the interest rates on Latisys’ borrowings, was funded by a consortium of eight leading financial institutions including RBC Capital Markets, TD Securities, Madison Capital Funding, Bank of America, CapitalSource, Caterpillar Financial Services Corp., GE Capital and SunTrust Robinson Humphrey.

Latisys recently established an east coast presence with a new 123,000 square foot data center in Ashburn, Virginia, and completed significant facility expansions at existing facilities in Chicago, Denver and Irvine, California.

The deals provide Latisys with a footprint in northern Virginia, one of the most active data center markets in the nation. The fast-growing managed hosting provider has existing data centers in Irvine, Denver and Chicago. The Corporate Campus at Ashburn Center is located in a fiber-rich section of Ashburn adjacent to major data center campuses operated by Equinix, DuPont Fabros, MCI and Digital Realty Trust.

”We believe the addition of this campus in Ashburn provides an outstanding east coast presence in a strategic market, while at the same time complimenting our other U.S. markets, allows us broader reach into business and government customers, while positioning Latisys with an important gateway to Europe” said Pete Stevenson, Chief Executive Officer at Latisys. “The expansion reaffirms Latisys’ flexible service delivery approach is resonating with organizations that face demanding IT infrastructure and growth requirements.”

Latisys acquired Pryme, which had an existing lease for all 71,192 square feet of space in Building C of the complex. Latisys assumed Pryme’s lease and also leased an additional 51,905 square feet in Building B, apparently for development as a data center property. The two leases will each expire in May 2021.

Latisys was founded in 2007 as Managed Data Holdings (MDH) with backing from Catalyst Investors and Great Hill Partners. It has moved quickly to build a footprint in the managed hosting sector, acquiring three providers and quickly expanding its data center capacity. Here’s a recap:

• October 2007: Buys managed hosting Intelenet in Irivine, Calif and adds 12,000 square feet of new space.
• January 2008: Acquires Denver colocation and managed hosting company Data393 and accelerates a planned 10,000 square foot expansion.
• August 2008: Purchases Stargate in the Chicago market and starts an expansion project.
• March 2009: Rebrands as Latisys.

The interior of the Latisys data center in Oak Brook, Illinois, which has recently been expanded.

Latisys has completed an expansion of its Chicago data center, adding 9,000 square feet of high-density raised floor space, the company said today. Latisys has also accelerated the second phase of the expansion project, which is currently underway and will add an additional 13,000 square feet of space to the 86,000 square foot Oak Brook, Illinois facility in the third quarter of 2009.

The company said that 70 percent of the new expansion space was pre-sold, and the Oak Brook facility now houses approximately 70 managed hosting and colocation customers. Latisys has roughly doubled the size of its Chicago employee base since the beginning of the year and expects to add additional staff over the next six months.

“An increasing number of organizations are turning to our suburban Chicago facility as a cost-effective, secure and seamless way to address their long term need for additional data center space, power and services,” said John McCreary, general manager, Latisys Corp. “The completion of the first phase of our facility expansion and employee growth reflect Latisys’ commitment to providing customers with the scalability, flexibility and agility to grow and thrive.”

Credit Crunch a Demand Driver
Latisys said the expansion was driven by demand for additional space from Chicago-area companies that have maxed out the power and space in their existing facilities. It also noted that the tight credit markets have made it more difficult to raise funds for data center expansion, leading companies to opt for outsourcing their requirments rather than building their own facilities.

“Demand for scalable outsourced IT infrastructure management solutions in Chicago mirrors the positive response we are seeing at all of our nationwide colocation facilities,” said Evans Mullan, chief operating officer of Latisys Corp. “Despite the growth, Latisys remains laser-focused on providing each customer with the highest level of service.”

Latisys was founded in 2007 as Managed Data Holdings (MDH) with backing from Catalyst Investors and Great Hill Partners. It has moved quickly to build a footprint in the managed hosting sector, acquiring three providers and quickly expanding their data center capacity. Here’s a recap:

• October 2007: Buys managed hosting Intelenet in Irivine, Calif and adds 12,000 square feet of new space.
• January 2008: Acquires Denver colocation and managed hosting company Data393 and accelerates a planned 10,000 square foot expansion. 
• August 2008: Purchases Stargate in the Chicago market and starts an expansion project.

“We’re taking the logical next step in the evolution of our company,” said Peter Stevenson, Chief Executive Officer and co-founder of Latisys. “We are an emerging national services provider designed to meet customer needs for colocation and IT management solutions. And our strategically located data centers in different geographical regions let us provide cost-effective disaster recovery solutions.”

The name Latisys (pronounced LAT-eh-sis) combines the words “latitude” and “information systems,” which the company says reflects its national reach and breadth of services.

“Demands placed on IT organizations and businesses for cost-effective outsourced data center solutions, information storage, security and scalability are significant,” said Stevenson. “Latisys offers scalable infrastructure management solutions that provide customers with exactly what they need, when they need it.”

The company was founded as Managed Data Holdings in June 2007 by Catalyst Investors and Great Hill Partners. It has moved quickly to build a footprint in the managed hosting sector, acquiring three providers and quickly expanding their data center capacity. Here’s a recap:

• October 2007: MDH buys managed hosting Intelenet in Irivine, Calif and adds 12,000 square feet of new space.
• January 2008: MDH acquires Denver colocation and managed hosting company Data393 and accelerates a planned 10,000 square foot expansion. 
• August 2008: Managed Data buys Stargate in the Chicago market and starts a 13,000 square foot expansion.  

The int.stargate.comerior of the Stargate data center in Oak Brook, Illinois (Stargate.com)

Managed Data Holdings continues to invest in expanding and upgrading the data center facilities it has acquired. The company has hired Syska Hennessy Group Construction, Inc. to design and build a major expansion of its recently acquired Stargate data center in Oak Brook, Ill. The 13,000 square-foot expansion will add approximately 7 megawatts of critical power to the facility, enabling Managed Data to provide a full suite of managed services at the facility.

The addition will give the Stargate center 29,000 square feet of raised floor space, with Managed Data projecting a full build-out of more than 65,000 square feet of usable space during 2009.

Managed Data Holdings (MDH) was founded in June 2007 by Catalyst Investors and Great Hill Partners. It has moved quickly to build a footprint in the managed hosting sector, acquiring three providers and quickly expanding their data center capacity. Here’s a recap:

• October 2007:MDH buys managed hosting Intelenet in Irivine, Calif and adds 12,000 square feet of new space.
• January 2008:MDH acquires Denver colocation and managed hosting company Data393 and accelerates a planned 10,000 square foot expansion. 
• August 2008:Managed Data buys Stargate in the Chicago market and starts a 13,000 square footexpansion.  

The Stargate data center is an 86,000 square foot facility that was completed in late 2007.

“This expansion and design, along with the investments we are making in our other data centers, allows us to provide the types of colocation, managed hosting and managed services that customers require for their critical systems in the most reliable manner,” said Evans Mullan, chief operating officer of Managed Data Holdings. “In addition to our flexible and adaptable solutions ranging from cabinets to 5,000 square-foot secure microsuites, customers will get an environment meeting their expansion needs, within a secure data center of our size and capabilities.”

Syska Hennessy Group provides engineering and construction management services for data center facilities to a range of clients, from moderately sized regional companies to many of the Fortune 100.