Morgan Stanley Plans NJ Data Center

An affiliate of Morgan Stanley has bought land in Franklin Township, N.J. for a backup data center for the New York-based financial services firm. Morgan Stanley Management Services II Inc. paid $12.3 million to purchase 17 acres of land from the J.G. Petrucci Company.

Morgan Stanley’s project has been in the works for two years, and will join several other data center projects in the area bordering Rutgers University in central New Jersey. The Bank of New York also has a data center in Franklin Township, while Savvis Inc. (SVVS) and AT&T (T) have facilities in Piscataway.

In 2006 Morgan Stanley gained approvals from Franklin Township for a 330,000 square foot data center, and also arranged for $106 million in structured financing from the New Jersey Economic Development Authority (NJEDA). It’s not clear why Morgan Stanley delayed purchasing the property for another 18 months.

Wall Street West Tenant is Acquired

The sole announced tenant for Wall Street West, the state of Pennsylania’s data center development initiative, has been acquired. Perimeter eSecurity announced Tuesday that it has bought Secure Electronic Communication Compliance Archival System (SECCAS), a leading outsourced provider of e-messaging compliance services.

Last April SECCAS announced that it would open a secondary data center in Scranton, Pa. The Pennsylvania facility is intended to provide full redundancy for its New York City operations and also serve as the primary location for the firm’s litigation-readiness (e-discovery) business. SECCAS is the first and thus far only company to announce a commitment to Wall Street West. It was not immediately clear what effect the acquisition might have on SECCAS’ data center plans.

The Wall Street West initiative is backed by a $15 million investment from the federal government and more than $6 million from the Commonwealth of Pennsylvania. Local and state officials believe they can build a successul project atop data backup mandates from the Federal Reserve, SEC and Office of the Comptroller of the Currency. Level 3 has been hired to build a high-speed fiber network between lower Manhattan and East Stroudsburg, Pa., which is expected to be completed sometime in 2009.

Old Bridge, NJ Approves Data Center Zoning

Officials in Old Bridge, New Jersey have approved a zoning change that will allow developers to build a huge data center campus that could eventually include up to 1.4 million square feet of data center space. The proposal had been criticized by some local residents and politicians, who questioned the economic development value of data centers.

The developer, Deep Run Corporate Campus LLC, want to build four 350,000 square foot data centers on 300 acres of land within the Crossroads property, which is owned by Old Bridge township. The huge project hopes to attract Wall Street financial firms seeking backup data centers for storage and disaster recovery.

In a meeting Monday, the township council voted to amend the redevelopment plan for the Crossroads site to allow data centers. “It looks like we actually have the prospect of providing tax relief,” Township Council President Pat Gillespie told local media. “We’d be foolish not to pursue it and see where it leads us.”

Xand Expands in New York Suburbs

Data center infrastructure provider Xand Corporation is expanding its facilities in Hawthorne, New York. Xand has leased 43,632 square feet of space at 17 Skyline Drive, which will add to 46,000 square feet of space at 11 Skyline Drive. Both properties are located in Mid-Westchester Executive Park in Hawthorne, about 30 miles north of Manhattan.

The expansion was announced by landlord Mack-Cali Realty (CLI), which said Xand had signed a new lease at 17 Skyline and extended its lease at 11 Skyline. The two leases, totaling 89,710, each have a term of 10 years, nine months.

HSBC Postpones NY Data Center Project

HSBC has postponed a huge data center project in upstate New York, citing the “business climate.” The decision by HSBC is the first sign that recent losses in the subprime mortgage market may prompt major financial companies to reassess the pace of their data center construction spending.

HSBC (HBC) left open the possibility that it may eventually build a data center in Niagara County, and local officials are hoping the decision is based on site location issues, rather than a wholesale decision to curtail the project. In May HSBC confirmed its plans to build a $139 million data center, to be followed by ongoing spending of $55 million a year over 15 years for a total investment of nearly $1 billion.

But early this month the bank decided not to buy the land it had targeted for the development in the small farm town of Cambria (pop. 5,000). After several weeks of rumors, HSBC issued a statement last week to local media.

“Given the current overall business climate, we are not proceeding at the original development pace we had planned for our data center in Niagara County, New York,” said the statement from HSBC spokesperson Francine Minadeo. “We remain in the planning phase and will take appropriate steps to update local officials and surrounding communities as is necessary and appropriate.”

Switch and Data Leases North Jersey Site

Switch and Data (SDXC) has leased a 163,500 square foot building in North Bergen, New Jersey to expand its data center network. The building is currently a data center for Sungard Availability Services, a disaster recovery specialist. Sungard’s lease expires Jan. 31, after which Switch & Data will take over the facility, according to lease documents filed with the SEC.

Switch and Data said in April that it expected to add 1,000 cabinets to its data center footprint in 2007, primarily by building out expansion space in existing sites. An example of that approach is the company’s recent expansion at the Infomart, a carrier hotel in Dallas where Switch and Data already leased space.

The lease of the Sungard facility is a slight departure from that approach, but consistent with the company’s plan to avoid new construction projects. The new facility provides Switch and Data with substantial expansion capacity for 2008 in a key business and connectivity market. The company has data centers at three carrier hotels in New York - 60 Hudson Street, 111 Eighth Avenue and 65 Broadway.

Savvis Expansion Tour Opens in NJ

The first stop on Savvis’ Data Center Expansion Tour in Piscataway, New Jersey had the trappings of a media event: flashing blue neon lights, speeches by the CEO and mayor, and a talk by a leading IT author. But the star of last night’s tour was the data center - an 88,000 square foot facility showcasing Savvis’ infrastructure and utility computing platform.

“We took a lot of time and put a lot of thought into how design this facility,” said Savvis CEO Phil Koen. “We believe this is absolutely state-of-the-art.”

Many corporate data centers are having trouble staying current with the latest requirements for high-density computing, presenting an opportunity for Savvis (SVVS) and other data center operators. “A couple of days ago, Gartner issued a report saying that any data center that was built prior to 2000 is probably technologically obsolete,” said Koen.

The Piscataway facility, housed in a Digital Realty Trust (DLR) building, is the third Savvis data center in New Jersey, joining sites in Weehawken and Jersey City. The NJ3 center includes 47,600 square feet of technical space on a 30-inch raised floor, with 34,000 square feet for colocation and the remainder housing Savvis’ utility computing customers.

Huge NJ Data Center Campus Proposed

Officials in Old Bridge, N.J. are considering a proposal for a data center campus that could eventually include 1.4 million square feet of mission-critical facilities. The development firm, Deep Run Corporate Campus LLC, envisions four 350,000 square foot data centers on 300 acres of land within the Crossroads property, which is owned by Old Bridge township. The premium data center space would cost an estimated $1,000 per square foot to build, bringing the potential cost of the project to $1.4 billion.

The huge project hopes to attract Wall Street financial firms seeking backup data centers for storage and disaster recovery. Old Bridge is a Middlesex County town located about 40 miles from lower Manhattan, providing adequate distance to be unaffected by most disaster scenarios in New York, yet close enough to allow real-time data mirroring.

Deep Run is a limited liability corporation formed by David Arena, Joseph Jingoli Jr. and Joseph Ryan. Jingoli’s firm is a veteran New Jersey builder with experience on utility infrastructure projects whose clients include PSE&G, the state’s major power company. Arena is a brokerage industry veteran who heads the New York office of Grubb & Ellis, while Ryan works with Lehr Construction, a New York construction management firm.