ASHBURN, VA—Griffin Capital Essential Asset REIT has acquired an 80% stake in a data center owned by San Francisco-based Digital Realty, which will keep a 20% interest in the property. The 80% stake traded for $148.4 million, which Griffin is funding via equity and loan proceeds. This is the Segundo, CA-based REIT's first investment in a data center facility.

The approximately 132,280 square foot data center was developed in 2009 and has 16 megawatts of utility capacity and 9 megawatts of IT load capacity powered by the dedicated 80-megawatt Greenway Substation located within the Ashburn Campus. This facility is 100% leased with a weighted average remaining lease term of approximately seven years.

Digital Realty will continue to manage the property.

The 132,280 square foot data center, which is valued at approximately $185.5 million according to Digital Realty, is expected to generate forward 12-month cash net operating income of approximately $13.1 million, representing a 7.05% cap rate.

The transaction, structured as a joint venture, also included a $102.0 million five-year bank loan at LIBOR plus 225 basis points, for a loan-to-value ratio of approximately 55%.

The transaction generated net proceeds to Digital Realty of approximately $168.4 million.

Loudoun County is arguably the data center capital of the US. It is home to over 40 mission critical data center facilities; regionally, data centers in Northern Virginia encompass over 9.8 million square feet with more than 50% of all global internet traffic passing through the market via the MAE-East internet exchange point.

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Griffin Ventures into Data Center Asset Class

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