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SAN FRANCISCO-Digital Realty Trust Inc. bought a piece of a major Internet gateway facility for the Pacific Northwest last week along with datacenter facilities in Florida, Massachusetts and Arizona. The total investment was $79.1 million.
The Seattle acquisition, of a piece of the 34-story, 389,000-sf Westin Building that is 90% leased, is the company's first Internet gateway facility serving Seattle and the Pacific Northwest. Digital Realty CEO Michael Foust calls it a "very strategic initial acquisition" in the tier-one market because it complements Internet gateway facilities the company already controls in Chicago, Dallas, San Francisco, Los Angeles, Miami, Phoenix and Charlotte.
Located at 2001 Sixth Ave., the property serves as the primary hub for Internet traffic in the Pacific Northwest. Foust says it also is the premier facility for corporate datacenter applications in the Seattle market. Approximately 185,000 sf of the building is built out as technical space.
Two of the other properties are datacenters that are fully leased to single tenants. The Florida property, in Miami, was a sale-leaseback with Peer 1 Network Enterprises Inc. The property address is 2300 NW 89th Pl. The Massachusetts property, in Waltham, is fully leased to Savvis. The address is 600 Winter St.
The fourth property, in Tempe, AZ, is a 55,000-sf warehouse in shell condition. The property is located at 2055 East Technology Circle in ASU Research Park. Digital Realty Trust plans to reposition the ground floor into turn-key datacenter space.
The acquisitions follows an 8-million share offering in October that generated net proceeds of $232.7 million. Proceeds from the sale of half of the shares were used to pay for an equal number of limited partner units delivered by Global Innovation Partners for redemption. The company said the remaining net proceeds would be used to reduce borrowings under the company's unsecured credit facility, debt the company said it planned build back up to fund acquisitions and redevelopments.
One of only a few companies that owns and manages corporate data centers and Internet gateways exclusively, Digital Realty owns 11.2 million sf. The company went public in November 2004 at $12 per share. At close of markets Friday, shares of Digital Realty stood at $32.93, off $0.14 on the day. Its 52-week high is $34.04.
In July, Digital Realty acquired three properties for $236.9 million. The acquisitions, totaling about 640,000 sf, included two data centers and an Internet gateway facility. The largest Internet gateway asset acquired in the deal was a 347,000-sf Internet gateway facility in Phoenix. The purchase price was $175 million. The larger of the two data center acquisitions is a 263,700-sf, three-building complex in Fort Worth. The seller, Savvis Corp., leased back the facility for 15 years. The purchase price was $50.6 million.
In April, Digital Realty Trust spent $71 million on 700,000 sf in three data centers in Canada, Georgia and Texas. The largest property was a 313,600-sf facility in Atlanta that is leased through 2011 to a major Internet enterprise as a key data center.
In June, Digital Trust began converting an additional 330,000 sf of owned space into turn-key data centers. The space is spread among 10 markets where company officials say there has been increasing demand. The vast majority of the space involved in the project--283,000 sf--is comprised of its 3 Corporate Place facility in Piscataway, NJ.
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