$25M Lease Demonstrates Data Center Demand

Lewitt, who represented Net2EZ in the 600 W. Seventh St. deal, says that the 20,000 sf that the data center provider will occupy at the Downtown L.A. telecom building was one of the last available spaces of its size that Cushman & Wakefield found in its search for a space large enough to meet Net2EZ's needs. The 600 W. Seventh St. building is owned by San Francisco-based Digital Realty Trust, which was represented by Cushman & Wakefield's Reid Tussing and Jason Feeley in the Net2EZ lease.

Lewitt, who also represented Net2EZ when the firm leased 20,000 sf last year at 2250 El Segundo Blvd. in El Segundo, points out that El Segundo is emerging as a hub of telecommunications buildings, just as Downtown L.A. did in the 1990s. He explains that one reason, besides the growing demand, is that much of the defense industry space in El Segundo lends itself to conversion into telecom centers.

The Net2EZ lease at 600 W. Seventh includes 15,000 sf of turn-key data center space as well as 5,000 sf of operations and office space. The company is expected to move into its new space within the next 60 days.

The 600 W. Seventh building, a former May Co. department store, is one of a number of Downtown L.A. buildings that were converted to telecommunication centers when the rise of the Internet and other technological advances greatly increased the demand for such space. That demand waned for a time but has since surged again, and Lewitt tells GlobeSt.com that demand will probably push investors and developers to create more telecom space in the next few years.

The Net2EZ deal follows a recent transaction in which Hines REIT acquired the 30-story, 664,248-sf One Wilshire class A office building and telecommunications switching center from an affiliate of the Carlyle Group. Hines paid $287 million for the property, which was built in 1966 and underwent a major renovation in 1992 that consisted primarily of telecommunication networks upgrades.