ColoSpace Deal Points to Tightening Datacenter Market
- May 22, 2008
ColoSpace, a provider of datacenter space, has leased about 16,200 square feet of a datacenter facility in Waltham, Mass. The space, a mid-sized deal in highly compact world of datacenters, represents ColoSpace’s sixth lease in the region, and comes at a time when datacenter space is harder to come by, according to industry specialists. The facility (pictured) serves local firms needing high-availability Internet access, along with high-density electrical capacity. ColoSpace currently manages several thousand servers, in addition to providing space and power for many more non-managed, customer-owned servers that located in private cabinets and cages within the company’s six existing datacenters. According to the participants in the deal, a surge in demand for datacenter space has diminished local inventory, a marked contrast from the post-tech bust glut of datacenter space in markets such as greater Boston. With space inventories falling, companies such as ColoSpace have fewer options for rentable space, and in some cases they are turning to custom buildouts, though that is a highly expensive option at perhaps $1,500 per square foot, up from the early 2000s, when costs were more typically about $700 per square foot. “The demand for datacenter space has been ramping up for a year or two, and now the property type is red-hot nationwide, unlike most other kinds of property,” James Cali, vice president of UGL Equis Corp., told CPN this morning. Cali, along with James Halepis and Philip Wonski of UGL Equis, represented ColoSpace in the deal. Chip Batchelder, managing director of Wyman Street Advisors, represented the landlord in the transaction. Demand, in fact, is outpacing supply in many places, noted Cali, because corporate data storage needs are increasing even as high building costs and the constrained capital markets make development tougher. “In some of the major markets, it’s hard to find blocks of even 20,000 or 30,000 square feet,” he said.