Niche Investment Strategies - Eli ShaashuaPresentation Transcript
DATA CENTER SECTOR vs. DJIA 2 YR.
DATA CENTER SECTOR PERFORMANCE 1Q11DATA CENTER SECTOR PERFORMANCE 2010
JIM CRAMER’S CRACKED CRYSTAL BALL
THE ECONOMICS - DATA CENTER DEALS/EXITS
NEWSLETTER December 2010 Announced Buyer Seller Transaction TV/EBITDAHistorical Value ($mm) Since 2008, the largest data center leases that have been Nov-10 Windstream Hosted Solutions $310.0 12.4x signed are technology-related companies such as Aug-10 Welsh Carson Peak 10 $410.0 12.5x Google, Yahoo, Microsoft, Apple and Facebook. Jun-10 Digital Realty Trust 365 Main $725.0 9.5x Facebook has absorbed more wholesale data center space May-10 Savvis FusePoint $124.5 10.4x than any other company during the last two years. May-10 Cincinnati Bell CyrusOne $525.0 11.8x However, colocation and cloud companies are not far Apr-10 Oak Hill ViaWest $420.0 10.0x behind. Mar-10 TDS Telecom VISI $17.8 6.1x During the last two years, companies have shifted their Dec-09 Digital Realty Trust Sentinel $375.0 10.0x focus from building their own data centers to leasing from Dec-09 Dada Group Poundhost $11.3 10.0x third-party operators. Oct-09 Equinix Switch & Data $867.2 11.6x Some of the reasoning behind this is to reallocate capital Sep-09 Carpathia Hosting ServerVault $35.0 7.0x to core operations, as well as the availability of wholesale May-09 HostMySite Hosting.com $50.0 7.0x space and competency of the operators. Aug-08 ABRY Partners Q9 $361.0 14.1x According to Gartner, 50 percent of data centers that were Jun-08 Deluxe Hostopia $123.9 17.6x built prior to 2006 are obsolete due to power and cooling constraints. Why Invest? There have been in excess of $3.5 billion of investment 20 percent annual revenue growth and recurring revenue. banking transactions within the data center space during Annuities, sticky customers and significant relocation costs the past 12 months. (servers can cost up to $8,000 per server to relocate) are just Data centers are one of the only types of real estate to some of the benefits of the data center sector. have experienced any appreciation during the last three Much of the recent investment transaction activity in data years. center space has been based on 10 to 12x EBITDA. Despite more than 5.5 million square feet of stand-alone There are only five national wholesale data center third-party data centers constructed in the last three years, developers. They are currently operating in 18 states. overall vacancy rates have remained around 10 percent. Strategic mergers and acquisitions, regional consolidations and IPOs (including REITs) will continue to provide exitFuture alternatives for merchant developers. There has been significant pent-up demand, led by Debt is still limited to providers with a proven track record. telecommunications firms, digital television, social The vast majority of tenants in multi-tenant properties double networking and financial firms, looking for space in 2011. their space size during the term of the lease. Healthcare will provide an uptick in regional leasing The specialized REITs (Digital Realty Trust, DuPont Fabros, activity in 2012 as companies determine their electronic and Terremark), as well as other REITs (Carter Validus, medical records solution in compliance with HIPAA Corporate Office Properties Trust, Allied and CoreSite) will also regulations. provide logical exit strategies. The state of data center space is vastly different than that of the late 90s, and most experts believe that it would take By The Numbers more than $5 billion of investment to over-saturate the Average number of racks that can fit into a 10,000-square- market. That is unlikely to occur during the next 10 years. foot POD is 320. Operators can generate as much as $39 million over 10 years in one POD or $3,900 per square foot. The larger wholesale data center developers are increasingly doing smaller typical “colocation deals,” Average cost to build a speculative data center is $600 per further blurring the lines between wholesale and square foot to $1,000 per square foot. colocation data centers. Average cost to build a speculative Tier III data center is $3 million per megawatt.
DATA CENTERS US METRO GEOGRAPHICAL CONCENTRATION
300 Boulevard East Weehawken 5851 West Side Avenue 111 8th Avenue North Bergen755 Secaucus Road Secaucus275 Hartz Way 32 Avenue of the Americas Secaucus 60 Hudson Street 165 Halsey Street Newark 75 Broad Street 25 Broadway 1400 Federal Boulevard Carteret Dusseldorf Mannheim Strasbourg Edmundston Seattle Moncton Sainte-Foy Truro Denver San Francisco Baltimore Washington DC Las Vegas Los Angeles Phoenix Dallas San Diego To Toronto Houston & Montreal Tampa To Chicago Miami Albany Boston White Plains To Halifax Stamford To Ashburn New York Newark
MAJOR DATA CENTERS/COLOCATION CENTERS IN MANHATTAN EURO-NA NYC METRO MAJOR HOSTING HOTELS
SOHO COLO, LLCCONFIDENTIAL DESCRIPTIVE MEMORANDUM MARCH 2011 PREPARED BY: FRANKLIN COURT PARTNERS, LLC
121 VARICK STREET• Constructed in 1928• 12-story 132,000 square foot• Open industrial floor with 12-14 foot ceiling heights capable of 225-275 lbs. per square foot load• Two passenger elevators, two freight elevators, and two stair towers.• High basement ceilings.
NYC METRO FIBER NETWORKMANHATTAN METRO FIBER NETWORK
121 VARICK STREET – DATA CENTER COLOCATION FACILITY
121 VARICK STREET – DATA CENTER COLOCATION PROJECT PROGRESSION PLAN PROJECTED FINANCIALS
Grubb & Ellis National Data Center Practice NEWSLETTER | New York Metro May 2011Spotlight: New York Since Google’s acquisition of 111 Eighth Ave., all available space in the building has been taken off the market. The most recent data center transaction in the building was Digital Realty Trust’s sublease of 53,000 square-feet to Telx shortly before the building’s l b ildi ’ sale. Sabey and local developer Young Woo are under contract to purchase 375 Pearl St., a 1-million-square-foot former Verizon switching building, for an estimated $100 per square-foot from M&T Bank. The building is well-suited for data center use, with very heavy floor loads, high ceiling heights, limited windows, and abundant shaft space. Verizon will maintain a three-floor condo interest in the building. 60 Hudson St., a major carrier hotel, has a 240,000-square-foot block of space available for lease that has attracted attention from both data center and office users. XO Communications has leased the entire eighth floor at 32 Sentinel Data Centers has delivered and commissioned its Avenue of the Americas. The 49,000-square-foot deal marks the first 10,000-square-foot data center pod to Pfizer. The first major data center deal in the building since Coresite leased company has also announced the closing of a $90 million the seventh floor. Meanwhile, Verizon is marketing the entire 10th loan led by M&T bank to complete its New Jersey facility floor of the building for sublease bringing approximately 45 000 sublease, 45,000 and a commitment from Kelso & Company to fund up to square feet with 2 MW of power to market. $300 million of equity capital for further expansion. Telehouse leased Lehman Brothers’ 60,000-square-foot former DuPont Fabros has delivered Phase 1 of its NJ facility. The data center at 85 Tenth Ave., for 15 years. The lease includes all first of two phases is 18.2 MW of which approximately 4 of the equipment and infrastructure left in place by Lehman MW has been leased to three different tenants. Brothers and former tenant Level 3 Communications. Colocation providers in New Jersey continue to pursue SoHo CoLo has begun marketing a new data center project at opportunities. Recent announcements include Telx adding an 121 Varick St., a 155,000-square-foot facility with six floors of additional 15 000 square feet of raised floor space in Clifton 15,000 Clifton, 13,250 square feet each, available for data center use. SoHo QTS expanding its Jersey City facility to 50,000 square feet CoLo will be installing the first 10 MW of a 15 MW power total and Net Access Corporation opening a new 50,000- commitment this spring. The building’s location along the Hudson square-foot facility in Parsippany. Equinix is expected to open Street/Ninth Avenue corridor allows for low latency connection to its newest location in Secaucus in early 2012. NYC’s major carrier hotels and networks. Development projects in New Jersey also continue to moveSpotlight: New Jersey forward. Russo Development has announced a data center i/o Data Centers has leased the 830 000-square-foot former 830,000 square foot development on 71 acres in Somerset. Mountain New York Times printing facility in Edison, with plans to rollout Development Corporation has filed plans to construct a the first wholesale data center property dedicated to its own 213,000-square-foot building next to its existing facility in modular data center container solution. The property is next to a Clifton (Telx is expected to be the single tenant of the major PSE&G switching station and a wealth of fiber located building), Blue Vista Properties is moving forward with plans along the NJ Turnpike. to redevelop a 270,000-square-foot former industrial building in Edison, and DCI Technology has begun a $4 Digital Realty Trust leased half of its available powered shell space million renovation of its existing 55,000-square-foot data at 365 South Randolphville Road in Piscataway to Savvis, leaving center facility in Teaneck, which it is marketing for lease. 56,000 56 000 square feet of powered shell space and 11 000 square feet 11,000 of turnkey data center space available for lease. Jim Kerrigan Michael Mandel Director, National Data Center Practice National Data Center Practice 312.224.3240 | email@example.com 212.326.4955 | firstname.lastname@example.org To see past newsletters, click on the following link: http://datacenterpractice.com/?cat=57