Tuesday, February 07, 2017

QTS wants to land more deals in DFW after buying $50M data center campus in Fort Worth

Executives from international data center provider QTS Realty Trust Inc. (NYSE: QTS) say they plan to expand their North Texas footprint shortly after buying a $50 million, 53-acre data center campus in Fort Worth.

The decision to rapidly grow in Dallas-Fort Worth comes years after redeveloping a former semiconductor plant in Irving in 2014.
The newly purchased 260,000-square-foot data center in Fort Worth, which was purchased from Chicago-based Health Care Service Corp., will be the Overland Park, Kansas-based data center provider's second North Texas data center.
The 8-megawatt data center has about 40,000-square-foot of built-out raised floor space, but QTS plans to expand the property's offerings with additional raised floor space.

In all, the Fort Worth data center campus can support more than 300,000 square feet of raised floor space and 60 megawatts of gross power.

That ability to grow QTS' presence in Dallas-Fort Worth at the site was an attractive proposition, given North Texas is becoming a big data center market, said COO Dan Bennewitz, who oversees QTS' product marketing and sales.

"Dallas-Fort Worth is a very attractive market for us," Bennewitz told the Dallas Business Journal."It is a large metro area with a great business environment."
North Texas is the fourth largest data center market in the United States and it continues to climb, real estate executives say. Those tracking data center deals say the region could lease 40 megawatts to 60 megawatts this year.

Other than expanding the Fort Worth's data center campus, Chief Investment Officer Jeff Burson said the company doesn't plan on upgrading the Health Care Service Corp. facility, which is already a "tremendous facility."

"This campus is top notch and we are excited about it," Burson told me. "This also reflects a business model we have developed to unlock the value in sale-leasebacks to our core customers. This is not the first transaction like this."

In 2014, QTS had acquired a similar data center operations in New Jersey in a strategic partnership with S&P Global, formally known as McGraw Hill Financial. And QTS is on the hunt for more data center deals like this, he said.

Candace Carlisle/Dallas Business Journal.