Monday, August 24, 2015

Lincoln Property, T5 bring new data center to downtown Dallas

Lincoln Rackhouse, an affiliate of Dallas-based Lincoln Property Co., and Atlanta-based T5 Data Centers are teaming up to bring a new data center — a telecommunications hotel-focused property — to downtown Dallas, bringing much-needed capacity to the region.

"Nobody has built anything like this since the original tel-co hotels have been developed, such as the Infomart or 2323 Bryan Street," Curt Holcomb, a senior vice president of JLL's data center group in Dallas, told the Dallas Business Journal.

"Part of it is because telecommunications and fiber have become more important over the last five years and, until now, the only capacity and space in the hotels are full."

The partnership plans to build a multistory data center with roughly 300,000 square feet of space at 899 N. Stemmons Freeway, which is currently owned by Dallas County. The existing 53-year-old government building was last valued at $12.3 million, according to county records.

Even though the new purpose-built data center — the first of its kind — likely won't take existing tenants from the Dallas Infomart of 2323 Bryan St. in downtown Dallas, Holcomb and others expect new telecommunications tenants to consider the new property, which is expected to be completed in 2017.

"This gives companies an alternative to the data centers in the northern suburbs and is another place where they can develop a telecommunications-heavy presence," he added.

North Texas has seen a flood of new data centers from Facebook landing in north Fort Worth to Equinix Inc. (Nasdaq: EQIX) landing in Plano. That trend isn't likely to change, said Bryan Loewen, the lead of Newmark Grubb Knight Frank's global data center practice.

"There's quite a bit of fiber and power in these surburban markets, but Dallas proper hasn't seen so much data centers development," Loewen told me. "The sites that are most accommodating for data centers are already developed."

The Stemmons Freeway site has its challenges with an existing building already on the property and Interstate 35E being a route for hazardous material. But the wealth of fiber and power on the property makes it stand out compared with other interior data center sites, he said.

Candace Carlisle/Dallas business Journal