Wednesday, August 25, 2010

Digital Realty Acquires Two Data Centers for $400 Per Square Foot

DLR announced yesterday that it had acquired two facilities fully leased to telecom carriers for $50.3 million. One of the buildings is a 69,700 square foot building in San Jose, the other a 56,000 square foot facility the company refers to as a "primary switch facility" without providing any greater detail.

The $400 per square foot purchase price is just over half of the $789 per square foot the company paid earlier this year for the 919,000 square foot Rockwood Capital portfolio of buildings. The difference likely reflects the lower lease rates paid by telecom providers to house switches and routers compared to what corporations pay for servers, storage, and enterprise networking equipment. This is also represents an economic opportunity for carriers who can conserve the capital that would have otherwise gone into building central offices.

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