avison young data center opportunities june 2013 newsletter

© 2013, Avison Young. The information contained herein was obtained from sources deemed reliable and is believed to be true; it has not been verified and as such, cannot be warranted nor form any part of any future contract. David Horowitz Rob Walters Principal, Data Center Group Principal, Data Center Group [email protected] [email protected] Data Center Opportunities | June 2013 Avison Young Data Center Practice Data Center Activity Around the Country While currently there is a glut of turn-key space in certain U.S. markets, there is very limited additional wholesale space under construction. Speed to market is going to be the key for companies that want to take advantage of what will be a dearth of Tier III wholesale space options within particular submarkets in 2014. To see past newsletters, please click on the link below: http://www.datacenterpractice.com/ Developers, colocation companies, and tenants will be revisiting Power Base Buildings (PBB) to answer speed to market opportunities in certain submarkets. Power Based Buildings typically have power and fiber at the property and operators are marketing the space “as is”, or is in the process of building out turn-key wholesale space. There are several underserved markets with great opportunities. SUBMARKET: DOWNTOWN CHICAGO Why: There has been no new wholesale data center properties developed in Downtown Chicago during the last 10 years. Suburban Chicago and the 2 nd best leasing in the U.S. in 2011; has strong results YTD. Downtown Wholesale Vacancy Rate: Less than 2%; CoreSite has only downtown plug & play space. Challenges: Many of the proposed data centers have been, or are in the process of being acquired or condemned through eminent domain by various government authorities. Hidden Opportunity: There is an 8 acre site 3 blocks south of 350 East Cermak. 350 East Cermak at 99.9% leased is one of the most well connected properties in the country; rates are over $200/kW for what limited space they have available. Opportunity to take advantage of existing NOI and build a new asset on same site. SUBMARKET: NORTHERN VIRGINIA Why: During the past 18 months, there has been a significant amount of wholesale transactions signed by Facebook, Microsoft, Rackspace, and LinkedIn leaving some of the largest data center developers with little or no space through the remainder of 2013. Largest Competition: Corporate Office Properties Trust in Manassas has one of the premier Tier III blocks of space, but significant tenant demand could absorb current availability by the time this property is converted to “turn-key” data center. Highlighted Opportunity: 515 Shaw Road, Sterling, VA This concrete tilt up property is 129,000 square feet with up to 70,000 square feet of expansion on 11 acres of land. 5 MW of power immediately available, expandable to 20 MW. 16’ minimum clear heights with large column-free bays – ideal DC conversion opportunity within the Loudoun County data center market. SUBMARKET: ORANGEBURG, NY Why: Although demand has been moderate in the Tri- State Area since inception of wholesale space, there hasn’t been a submarket that has provided companies with inexpensive power, discounted taxes, and only 35 minutes from Midtown. Competition: While there is significant turn-key space available in New Jersey, there are limited options in the region that can provide disaster recovery space, reduced taxes and $.082/kW. Highlighted Opportunity: 1 Ramland, Orangeburg, NY Located on 32 acres, the entire property has over 230,000 square feet of space built out with 60,000 sf of disaster recovery. There is 24.4 MW of total capacity. On-site dual fed customer substation.

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Avison Young Data Center Practice- Data Center Opportunities Newsletter- June 2013

TRANSCRIPT

2013, Avison Young. The information contained herein was obtained from sources deemed reliable and is believed to be true; it has not been verified and as such, cannot be warranted nor form any part of any future contract.

David Horowitz Rob Walters Principal, Data Center Group Principal, Data Center Group [email protected] [email protected]

Data Center Opportunities | June 2013 Avison Young Data Center Practice

Data Center Activity Around the Country

While currently there is a glut of turn-key space in certain U.S. markets, there is very limited additional wholesale space under construction.

Speed to market is going to be the key for companies that want to take advantage of what will be a dearth of Tier III wholesale space options within particular submarkets in 2014.

To see past newsletters, please click on the link below: http://www.datacenterpractice.com/

Developers, colocation companies, and tenants will be revisiting Power Base Buildings (PBB) to answer speed to market opportunities in certain submarkets.

Power Based Buildings typically have power and fiber at the property and operators are marketing the space as is, or is in the process of building out turn-key wholesale space.

There are several underserved markets with great opportunities.

SUBMARKET: DOWNTOWN CHICAGO

Why: There has been no new wholesale data center properties developed in Downtown Chicago during the last 10 years. Suburban Chicago and the 2nd best leasing in the U.S. in 2011; has strong results YTD.

Downtown Wholesale Vacancy Rate: Less than 2%; CoreSite has only downtown plug & play space.

Challenges: Many of the proposed data centers have been, or are in the process of being acquired or condemned through eminent domain by various government authorities.

Hidden Opportunity: There is an 8 acre site 3 blocks south of 350 East Cermak. 350 East Cermak at 99.9% leased is one of the most well connected properties in the country; rates are over $200/kW for what limited space they have available. Opportunity to take advantage of existing NOI and build a new asset on same site.

SUBMARKET: NORTHERN VIRGINIA Why: During the past 18 months, there has been a

significant amount of wholesale transactions signed by Facebook, Microsoft, Rackspace, and LinkedIn leaving some of the largest data center developers with little or no space through the remainder of 2013.

Largest Competition: Corporate Office Properties Trust in Manassas has one of the premier Tier III blocks of space, but significant tenant demand could absorb current availability by the time this property is converted to turn-key data center.

Highlighted Opportunity: 515 Shaw Road, Sterling, VA This concrete tilt up property is 129,000 square feet with up to 70,000 square feet of expansion on 11 acres of land. 5 MW of power immediately available, expandable to 20 MW. 16 minimum clear heights with large column-free bays ideal DC conversion opportunity within the Loudoun County data center market.

SUBMARKET: ORANGEBURG, NY

Why: Although demand has been moderate in the Tri-State Area since inception of wholesale space, there hasnt been a submarket that has provided companies with inexpensive power, discounted taxes, and only 35 minutes from Midtown.

Competition: While there is significant turn-key space available in New Jersey, there are limited options in the region that can provide disaster recovery space, reduced taxes and $.082/kW.

Highlighted Opportunity: 1 Ramland, Orangeburg, NY Located on 32 acres, the entire property has over 230,000 square feet of space built out with 60,000 sf of disaster recovery. There is 24.4 MW of total capacity. On-site dual fed customer substation.

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