The properties, which boast a combined 1,600-tenant roster, are situated in eight cities and include Dallas-Ft. Worth, Houston and Washington, DC. Meanwhile, Cogent is negotiating deals with other REITs that have office properties in Austin and San Antonio. Denver too is on Cogent's "to do" list.
The contract, which is not exclusive, comes about three months after signing a similar pact for 23 buildings with 5.6 million sf and about 2,000 tenants that are overseen by Jamison Properties Inc., a leading property management and leasing firm in Los Angeles. Cogent has been aggressively pursuing key contracts to set up a coast-to-coast network for the upscale multi-tenant industry. The Crescent contract puts the next-generation ISP provider "well over the 100-million sf mark," David Schaeffer, Cogent founder and CEO, tells GlobeSt.com.
Cogent presently is conducting due diligence for about 15 more Crescent properties to see if they can be outfitted. First-round delivery service begins in first quarter 2001 and will be done in phases over the next 18 months. Several months of lead time is necessary for Cogent to seal deals with multiple fiber-optic providers in target markets and secure real estate licenses for distribution rights and entry. Cogent also must install necessary feeders for its ultra-high speed Internet access.
The hot property list includes Crescent's 3 Greenway Plaza in Houston, which will be the first to be brought on line. That move will occur by month's end, with the building doubling as Cogent's Houston hub and area sales office.
Howard Lovett, Crescent's vice president, says the Cogent contract will ensure tenants "that they have all the tools to operate their businesses effectively in the New Economy."The company is selling itself to REITs and leading owners of high-end, multi-tenant properties by paying them a fixed $1,000 per month regardless of building size plus an extra 10% if more than 10 customers per building use Cogent as their ISP. Cogent also courts owners of properties neighboring the connected buildings. The Crescent pact, says Schaeffer, will give Cogent access to about 50% of the aggregate market in the Dallas-Ft. Worth metroplex.
Schaeffer tells GlobeSt.com that he isn't concerned that the deals are mortared in exclusivity. "We believe as a company in general that exclusive contracts are wrong," says Schaeffer. "They preclude choice."
In the past 1.5 years, Cogent has accrued pacts for more than 100 million sf in 170 buildings in New York City, Chicago, Philadelphia, Boston, Miami, San Francisco, Seattle, San Diego, San Jose, CA as well as Washington, DC, Dallas, Ft. Worth, Houston and Los Angeles. The firm maintains offices in Dallas and Houston.
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