Technology landlord Digital Realty Trust (DLR) said today that it will launch a large-scale project to redevelop data center space it owns in 10 major U.S. markets. The investment represents a huge vote of confidence in the data center market amid growing demand for premium space. It also allows Digital Realty to capitalize on data center space shortages and rising prices in major Internet cities.
Demand for data center space is growing along with the Internet economy. As television and movie content moves to a digital delivery model, an enormous volume of digital files will need to be stored in data centers to provide "always on" high-speed access. Meanwhile, Microsoft, Google and Yahoo are planning huge infrastructure expansions to deliver online services and applications.
Doigital Realty's redevelopment projects will create more than 330,000 square feet of advanced data center space, with approximately 40 megawatts (MW) of available UPS load. Sites selected for development include Digital Realty Trust facilities in Northern New Jersey, Boston, Philadelphia, Charlotte, Atlanta, Chicago, Austin, Dallas, Los Angeles and San Francisco.
"Demand for high-quality datacenter space has been strong in each of these ten cities, which makes the timing of these redevelopment projects ideal," said Chris Crosby, Senior Vice President of Sales and Technical Services at Digital Realty Trust. "Each of these datacenter spaces will offer the world-class technical capabilities that Digital Realty Trust facilities are known for, including outstanding electrical power availability - an increasingly rare commodity in the technology real estate market."
Here's an overview of the 10 projects announced today:
- Northern New Jersey: A marquee redevelopment effort, the 283,000 square foot 3 Corporate Place facility in Piscataway is a fully entitled and master planned data center designed for twelve (12) pods of 12,000 raised-floor square feet with 1,100 KW of 2N UPS load per pod. Each pod has the ability to be a standalone data center or part of a shared infrastructure system. The initial pod has a target completion date of Q4 2006. Additionally, Digital Realty Trust will provide clients with customization options for combining pods into full floor data centers, full 2N redundancy for mechanical electrical plant and self-managed environments.
- Boston: At the 115 Second Avenue data center facility in Waltham along Boston's Route 128 "Technology Corridor," a total of 38,500 raised-floor square feet of space is being developed in three pods, with approximately 1,100 KW of available N+1 UPS load in each pod. Two of the pods have target completion dates in Q3/Q4 2006 and one pod has a target completion date of Q1 2007.
- Philadelphia: At the 833 Chestnut Street facility in Philadelphia's Central Business District, 12,000 raised-floor square feet of space is being created, with 1,100 KW of available 2N UPS load. The project has a target completion date of Q4 2006.
- Charlotte: At the 125 N. Myers Street Internet Gateway facility in downtown Charlotte, 7,000 raised-floor square feet of space is being developed, with 900 KW of available 2N UPS load. The project has a target completion date of Q3/Q4 2006.
- Atlanta: At the 375 Riverside Parkway data center facility in suburban Atlanta, 12,000 raised-floor square feet of space is being created, with 1,100 KW of available 2N UPS load. The project has a target completion date of Q4 2006.
- Chicago: At the 350 East Cermak Road Internet Gateway facility in Chicago's Central Business District, 6,500 raised-floor square feet of space is being developed, with 900 KW of available 2N UPS load and a target completion date of Q4 2006.
- Austin: At the 7500 Metro Center Drive data center facility in Austin's Met Center Business Park, Digital Realty Trust is implementing a master redevelopment plan for a high-density data center that will provide more than 10 MW of N+1 UPS load across 50,000 raised-floor square feet of space.
- Dallas: Digital Realty Trust is redeveloping space at two of its facilities in the Dallas area. At the 2323 Bryan Street Internet Gateway facility in downtown Dallas, a total of 10,000 raised-floor square feet is being created with 1,000 KW of available 2N UPS load and a target completion date in 2007. At the 4025 Midway Road data center facility in suburban Dallas, 26,000 raised-floor square feet of turn-key Datacenter space will be developed, with 2,700 KW of available 2N UPS load and a target completion date of Q4 2006.
- Los Angeles: At the 600 West 7th Street Internet Gateway facility in Downtown Los Angeles, 8,700 raised-floor square feet space will be created, with 810 KW of available of available 2N UPS load and a target completion date of Q4 2006.
- San Francisco: At the 200 Paul Avenue Internet Gateway facility in south San Francisco, a total of 14,600 raised-floor square feet of space is being developed in two pods. The first pod has 480 KW of available 2N UPS load with a completion date of Q2 2006. The second space has 1,300 KW of available 2N UPS load with a completion date of Q4 2006.
This continues a trend in which landlords of carrier hotels and data centers have begun developing unused space and marketing it directly to end users, and takes advantage of Digital Realty's expertise in developing and managing data center space. Digital Realty is also seeking to gain a competitive advantage, offering itself as a long-term landlord in a market that is attracting many new investors and developers.
In its announcement, Digital Realty emphasized its long-term commitment to the data center market, apparently seeking to reassure customers concerned about landlord stability. As the technology real estate market has rebounded, the value of data centers has increased, attracting new investors and developers. Digital Realty suggests that this could provide them with an advantage.
"Digital Realty Trust is the only owner that specializes in datacenter facilities on a national and international basis and that has true expertise in building and operating advanced turn-key datacenter facilities," said Michael F. Foust, Chief Executive Officer of Digital Realty Trust. "We have a long-term commitment to the technology real estate market, and that aligns our own interests with those of our clients. Our commitment guarantees stability and consistency of service that is in stark contrast to what many customers experience when they work with developers and investors with short-term divestiture goals. We are committed to being long-term partners with our tenants."
"Control is particularly important for most clients, and our approach is fundamentally different from what one would find in a colocation environment where companies often cannot be in command of their data center," noted Crosby. "Digital Realty Trust gives tenants a tremendous amount of control over their environment: They can have control over security levels, the kind of equipment they install, facility management, and many other issues. We are here to support the technical and business needs of our clients, and our unique approach to working with tenants is a reflection of that commitment."