Digital Buys Another Data Site Here for $28M

On Aug. 29, the company announced that it bought two other buildings in St. Louis, 900 Walnut St. and 210 Tucker Blvd. The buildings, collectively known as the Bandwidth Exchange Buildings, were sold for $53 million, says a Digital spokeswoman, who says she doesn't have information on the seller.

She says it's just coincidence that the two purchases happened close to the same time. The company's business model is to buy up data centers and internet gateways around the country, properties that are very expensive to build and outfit, and are rare enough to have high demand by high-tech users. "These were assets we had on our radar screen," the spokeswoman tells GlobeSt.com.

The seven-story 900 Walnut building is the only Internet gateway facility in St. Louis. The 110,000-sf building is 100% leased. "There's only a finite number of these buildings in the country," the spokeswoman says.

The 18-story 210 Tucker building is a multi-tenant data center, with 200,000 rentable sf, including 62,000 sf of redevelopment space. The rest of the building is leased up. Michael Foust, CEO, said in a statement that the company will redevelop the rest of the space. The firm is engaged in a redevelopment program for 400,000 sf across its 66-property portfolio in 22 markets.

"We started as a private equity fund, with CalPers as a partner, in 2001, to focus on acquiring technology related properties," the spokeswoman says. Coming at the time of the dot.com fallout, the move "was a contrarian play," she admits, "but we felt as though despite economic challenges, the Internet was not going away. Previous owners had made significant investment in these properties, it requires tremendous power to run and cool them, it can be a $600 to $800 per sf build-out cost." The goal is to own these data centers and Internet gateways in all the major cities, the spokesman says. "It's the tightest market in the world," she says.