Green Street Advisors

 

 

Commercial Property Executive: LA-Area AT&T Data Center Trades for $80M

According to Commercial Property Executive: Tampa, Fla.-based Carter Validus Mission Critical REIT II Inc. has acquired the 288,000-square-foot building housing the AT&T Hawthorne Data Center in metro Los Angeles for about $79.5 million.

...

In “powered shell” data centers like this one, “the tenant owns the costly data center infrastructure (e.g., generators, cooling equipment), while the landlord owns the land and building shell,” explained Lukas Hartwich, a senior analyst with Green Street Advisors. Leases for such properties are typically triple-net, as is the case here, he told Commercial Property Executive.

Though powered shells are attractive investments, they are less common than “turn-key” data centers were the landlord funds the costly improvements, Hartwich continued. “Powered shells tend to have ‘stickier’ tenants, because their investment in the space makes them less likely to move out at the end of a lease,” he added. The AT&T lease does not expire until May 2026, according to an SEC filing by CVMC REIT II.

...

To view the full article from Commercial Property Executive, click here.