X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SEATTLE-Hoping to cash in on skyrocketing demand for space to power the Internet, developers both local and national are setting their sites on telecom data facilities.

“What’s makes it so attractive to developers is that all they have to do is provide the heavy power required and get the permits, and the tenants will do the rest,” Rick Osterhout, a broker with Kidder Mathews & Segner, tells GlobeSt.com. “By doing so, it enables the developers to charge three, four, even five times the amount traditionally charged for lease space.”

A good example, says Osterhout, is the New York real estate firm Argent Ventures. Having purchased the Odom Corp. beverage distribution warehouse last June for $9.5 million, Argent has applied for permits to convert the 125,000-sf building at 26 S. Hanford St. into Telecom Central.

When the facility is complete early next year, instead of the traditional $5 to $6 per sf that industrial space usually goes for, Argent can get away with charging communications companies $20-$25 per sf because of the demand. Four companies are reportedly expressing interest in the space.

There are issues to be considered, says Osterhout, such as ensuring that the facility has adequate access to power, which is in limited supply. The facility also must be located near fiber lines from telecom companies, and tenants usually look for a minimum of four telecom providers.

Despite these limitations, Kidder Mathews & Segner is so convinced of the potential that it has two other telecom data facilities in the works: the Spectrum Technology Center, a proposed 212,000 sf telecom facility on property owned by Boeing Realty Corp., and the Stadium Place, a telecom data center/office space that will be marketed to companies such as Amazon.Com and Go2Net.

“I think we are in the second inning of a nine- inning game as far as the wired world is concerned,” notes Osterhout. “Everything is moving to a web-based something. And if you look at the data or telecommunications industry, a lot of things are happening there. The bi-product is that everyone needs a place to house the equipment.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

 

GlobeSt. NET LEASE Fall 2021Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.