Two of the data center industry's largest players have renewed their vows. Interconnection and data center specialist Equinix and landlord Digital Realty Trust have entered into agreements for five data center lease renewals in key markets.
Equinix (EQIX) will renew existing leases with Digital Realty for five data center properties located in Chicago, Dallas, Los Angeles, Miami and Washington, D.C. All five of the leases were negotiated at market rates and include 15-year initial terms from the current lease expirations, as well as two approximately 10-year renewal options at pre-negotiated rental rates. The Chicago lease includes space in one of the city's key connectivity hubs, 350 E Cermak.
“We have had a long-standing and productive relationship with Digital Realty and are pleased to have negotiated mutually beneficial lease renewal agreements over effectively a 35-year period on these five assets at rates in-line with our expectations,” said Howard Horowitz, senior vice president, Global Real Estate for Equinix. “This represents an important step in managing our real estate portfolio and provides greater operational flexibility, predictability and consistency for key data center assets.”
“These early renewals represent a win-win for both companies, as they provide long-term operational certainty to a strategic customer, while simultaneously unlocking a portion of the embedded rent growth within our portfolio,” said David Caron, senior vice president, Portfolio Management for Digital Realty. “Furthermore, the cash rental rate uplift also provides a real-time read on the health of current data center pricing.”
Equinix is planning to convert to a real estate investment trust (REIT), a status in which property control is important.
Equinix connects more than 4,000 companies to their customers and partners inside its network of 95 data centers in 31 markets across the Americas, EMEA and Asia-Pacific. The company manages nearly 5.8 million square feet of data center space.
Digital Realty Trust operates 23.7 million square feet of space in 127 technology properties in 32 global markets.