GI Partners Secures $389M to Refi DTLA Data Center

GI Partners has secured a $389.25 million loan to refinance One Wilshire, a 661,553-square-foot data center in Downtown Los Angeles. The multi-tenant property is a teir-3+ data center and office space that is considered to be the most important point of connectivity between the US and the Pacific Rim. GI will use the loan proceeds to pay off the current debt on the asset and to repatriate a portion of the equity.

Executive managing director Kevin MacKenzie, managing director Brian Torp, director Jake Wagner and associate Samuel Godfrey with JLL’s Capital Markets group and managing director Darren Eades from JLL’s brokerage team worked to secure the capital on behalf of the borrower. Goldman Sachs funded the non-recourse loan, which has a 10-year term and a fixed interest rate.

Located at 624 S. Grand Ave., One Wilshire is equipped with a vast in-ground fiber optic network and five separate utility power risers and 13 on-site generators with fuel storage for 24 hours of operation. It also features priority refueling status, along with separate and redundant data risers, exceptional antenna line of sight to much of the Los Angeles basin, a multi-tower antenna array and fiber connectivity to the rooftop. As a result, it is one of the largest Internet exchanges in the world and the most interconnected terrestrial facility in the Western US, according to JLL.

The state-of-the-art property is 89% leased to a mix of major interexchange and local exchange carriers, data communication companies and Internet service providers as well as financial services companies. And, demand for quality data center space is only increasing. According to research from JLL, the Los Angeles market absorbed 7.0 MW of data center space in the first half of 2021, a 250% increase over the same period in 2020. Increased data usage is driving the trend.

Demand for data centers could been a boon for office and retail owners that are struggling to fill vacancies. According to Phil Raglin, CEO of Alpha Lease Management, “Micro data centers and cryptocurrency farms…pair well with office and retail properties and are ideal ways for property owners to boost income. In fact, owners can lease out these spaces for as much as $500 per square feet, which is practically unheard-of for any other real estate use.” These properties are smaller versions of traditional data centers, like One Wilshire, but can help fulfill the vast demand for space.