EL SEGUNDO, CA- President of Server Farm Realty, Avner Papouchado is the guiding force behind the data center division of Red Sea Group. As RSG’s North American CEO since 1993, Papouchado—who has completed more than $600 million in domestic transactions and has generated profits in excess of $75 million for RSG—recently chatted with GlobeSt.com’s Natalie Dolce the company and his thoughts on the long-term potential of the data center industry.
There are two trends that contribute to the growth of data centers, says Papouchado. “First, the world is going digital and many processes that used to be analog are now done by computer, which exists across all industries.” Second, he says, is the move to the cloud environment. “The personal computer is giving way to smaller devices that allow most of the processing to be done remotely on servers housed in the cloud—all of which are located in data centers. Everything from mail and address book contacts to file storage to gaming is occurring in the cloud.”
According to Papouchado—whose is concentrating on developing and leasing its current properties in Santa Clara, CA, Moses Lake, WA, and Chicago in 2012—the firm plans on revealing one or two new locations soon as well as some build-to-suit relationships. In terms of how the company identifies properties to purchase and develop, he says that Server Farm follows its client’s lead. “We are believers in purpose-built data centers and look specifically at the climate and the type of cooling we can use in a particular area,” he says. Perfect examples, he says are the company’s data centers in Santa Clara and Moses Lake, “where we use direct and indirect evaporative cooling for big energy savings.”
When asked about the long term potential of data centers, Papouchado explains that they “remain strong as long as the players in the field stay disciplined and understand the pricing.” Data centers will be needed, he continues, “but there may be fallout in the industry as the players who are in it for a fast flip using very expensive money fall out. The industry is all about establishing a long term relationship with the clients; thus players that need a fast exit because they have no staying power may not survive.”
Other than cost, Papouchado tells GlobeSt.com that the most important factors that that differentiate one data center from another is design, reliability, and connectivity. “Great data centers are tailored to their locations. A data center in Santa Clara should not be designed like one in Chicago,” he says. “A data center for a retail [client] is not designed the same as a data center for an enterprise or a web client. Clients want price performance, and we feel we can do it better than anyone through better design.” The need for different types of connectivity drives price as well, he adds.
To read more about the topic of data centers, see a recent article on GlobeSt.com titled: Data Center Boom Brought by Health, New Tech.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
