San Francisco data center operator 365 Main has expanded into the Los Angeles market with the purchase of a 131,000 square foot facility in El Segundo. The 131,000 square foot facility was built by AboveNet, which invested $70 million to outfit it as a web hosting center.
"The business model we developed in San Francisco continues to outperform our expectations," stated Chris Dolan, President and CEO of 365 Inc. "This is the right time to expand our business footprint and strengthen the 365 brand." With financial backing from Rockwood Capital, 365 Main is looking at other expansion opportunities in the red-hot data center sector. "There are obvious cities on our radar," Dolan said, "some to meet the growing needs of our customer base, others to fill the void that exists in the industry."
"The only thing surprising about this expansion is that they waited so long to leverage their success in San Francisco," said Andrew Schroepfer, President of Tier1 Research. "365 Main has an enviable growth rate and the addition of a second high quality facility is the start of a wise expansion strategy considering the rising market demand for their services."
AboveNet rejected the lease for the El Segundo building after its parent company, Metromedia Fiber Network, filed for Chapter 11 bankruptcy protection in 2003. Landlord Kilroy Realty paid MFN $325,000 to acquire some of the equipment, and found itself with a world-class data center. 365 Main's business has been built upon the quality and affordability of former AboveNet properties. Its primary facility in San Francisco was purchased from MFN during its bankruptcy proceedings.
"This data center meets the reliability, maintainability and scalability for today's mission critical customer requirements," Peter Gross, CEO of EYP Mission Critical Facilities, said of the El Segundo center. "The flexible design, N+2 redundancy and essential facility status for seismic performance provide the best solution in Southern California. Dolan has had his eye on this facility for some time and feels the timing is perfect."