When Fortune Data Centers was looking for its first development project in 2006, it anticipated the importance of power and cooling in new facilities. "What we saw was that everybody would be looking for old data centers and then want to add power and cooling," said John Sheputis, the company's founder and CEO. "We thought, 'let's go find a mission-critical building that already had the power and cooling and then bring the fiber to it.' We decided that a retiring fab (semiconductor fabrication facility) would have the power and cooling we needed."
Sheputis and his partners acquired a former Seagate fabrication facility in San Jose, Calif., and are busy transforming the site into a 140,000 square foot data center in the heart of Silicon Valley. Fortune Data Centers plans to complete the 80,000 square foot first phase of the project in October.
It turns out that Sheputis didn't have to look far to find fiber. The facility is sandwiched between data centers for NTT and Verizon. "The buildings property lines are wrapped in fiber," said Sheputis.
Fortune Data Centers is led by executives with experience in both IT and real estate. Sheputis founded and managed several Silicon Valley ventures specializing in infrastructure management, including Totality (now a unit of Verizon Business). Tim Guarnieri, the VP and GM of Data Center Operations, is a veteran of the Palo Alto Internet Exchange (PAIX) and Switch and Data (SDXC).
The real estate side of the equation is represented by VP of acquisitions Will Fleming (previously Regional Acquisitions Director for Virtu Investments) and CFO Bruce MacLean, who was President of Embarcadero Advisors and a veteran of Trammel Crow.
The San Jose facility is expected to achieve LEED Gold certification, and will be supported by 16 megawatts of power from PG&E. Sheputis says power will be priced at roughly 9.5 cents per kW hour, which he called PG&E's "most competitive industrial tariff in Northern California." The building will be carrier-neutral, with connectivity from AT&T (T), Verizon (VRZN), Level 3 (LVLT) and AboveNet.
Sheputis said the existing power at the site was critical to the project. "There's no way we would get financing without a building with construction advantages," he said. "The capital markets are very constrained right now. It's a huge issue. If you are an independent developer, it's hard to find financing."
Sheputis says the model is one that can work in other markets. "If we're successful, we may remake the market for retiring fabs," he said.