Phil Horstmann, CEO

CHICAGO—As reported in earlier this week, Ascent Co., a St. Louis-based provider of data center solutions, just sold its CH2 Data Center Facility in suburban Northlake to Carter Validus Mission Critical REIT, Inc. for $211.7 million. It was the largest single portfolio acquisition to date for CVMC REIT. As part of the deal, CVMC REIT will provide new capital to expand the center’s capabilities and Ascent will continue to operate it and manage all development, design, construction and engineering. spoke to Phil Horstmann, the chief executive officer of Ascent, on how the company will move forward, and the role Chicago plays in the US data center sector.

Will Ascent use its new infusion of capital to expand just the Northlake center, or can you also use the funds for other facilities?

The new capital partners invested in the CH2 facility. Ascent and the private equity team that helped us fund the initial development of CH2 will continue to pursue speculative developments in other locations.

What sort of expansion do you plan for the Northlake center specifically?

There is some unoccupied space that has yet to be constructed since our model is to build-to-suit to our tenants’ specific technical and business needs. Currently, we have 1 MW of space to be built out in our wholesale colocation suite and more than 10 MW in another suite.

Are there any new services that Ascent will be able to bring to the Northlake center? Are there new types of tenants that you hope to attract?

We are continuing to provide the same services as before the ownership change. The 10+MW suite is ideal for high density users requiring flexibility in the design as well as the deal structure, and will benefit from lower power costs (due to our onsite electrical substation fed by transmission power). For our wholesale colocation suite, we continue to seek users with less than 1 MW of critical IT load, who are looking for brand new, efficient data center space.

Is Ascent seeking other partners to help monetize other data centers?

Not at this time. We are in a good position with our new capital partners funding expansion activities at CH2 and our private equity team helping to fund more higher risk, spec developments.

Is there something about REITs that make them especially attractive as partners for data center providers?

In this transaction, it was a great fit for both parties. CVMC REIT has deep financial resources and a commitment to critical facilities, where Ascent provides solutions for the full life cycle of data centers from development and engineering through construction and ongoing operations.

Are you seeing more interest from REITs in the data center space?

Yes, there has been a lot of renewed interest in the data center space over the last few years.

In general, do you believe data centers in the Chicago area will experience a lot of expansion in the near future? If so, why?

Yes, we continue to invest in Chicago and believe it is the place to be for a number of user groups and for a number of reasons – the city’s telecommunications infrastructure, its central and low risk location which should be of particular interest to the east and west coast businesses, the area’s low power costs, and the climate that lends itself to even better operational numbers from an efficiency standpoint.