Building owner Hartz Mountain Industries of Secaucus, wasrepresented in-house by SVPs Snezana Anderson and Remy deVarenneand VP Matthew Corpuel of CB Richard Ellis. Hartz was representedin-house by Charles Reese, VP of leasing. The deal carries a totalterm of 25 years including extensions; further terms were notreleased.

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For Switch and Data, the deal is a response to its need for morecapacity in the New York metro area, and the site will have accessto more than 300 networks in its existing sites in the region. Withthe expansion, Switch and Data will now have a total of 253,000 sfin the market.

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"This lease represents Switch and Data's first New Jerseyfacility," CBRE's Anderson says. "It's part of the company'soverall expansion strategy to satisfy growing customer demand."

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Keith Olsen, the company's CEO notes that "demand for rich mediais driving exponential IP packet growth. This growth requires scaleacross the entire supply chain, from content origination throughdelivery."

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Switch and Data CMO Ernie Sampera says that "this leaseperfectly met our real estate needs," noting that the site searchtook 10 months. "This was the best option for our capacityexpansion, because of the combination of availability of electricalpower to support our standards, existing data center infrastructureand the benefits offered by the State of New Jersey for newbusinesses."

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Switch and Data will move into the building in stages, relatedto its capacity demands and the need to build-out the site'sinterior. Hartz will lead that build-out, and Switch and Dataofficials anticipate an initial move-in starting in the fall.Company officials also estimate that the capital expenditures forthe project will be $75-80 million in 2008, and a total investmentof $105-115 million at build-out.

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"We expect to use cash on hand and our strong balance sheet tofinance the growth," Olsen says. "This expansion is in addition tothe previously announced investments in Dallas, Sunnyvale [CA] andToronto."

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The building, vacant when the lease was signed, is a formerSungard data/disaster recovery center. Those operations had beenrelocated to a newer, larger site in the region.

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