What's next for data centers?
September 30, 2002
By Christine Miller Ford,
Space glut totals more than 2.7 million square feet
Some of the data centers left empty when tech's heyday ended offer a remarkable deal for companies in the market for flex space, said Bethesda-based Commercial Brokers' vice president Nick Propps.
"Some of the carpet looks like it's never been walked on," said Propps, whose 30-year-old company handles space in Montgomery and Prince George's counties and the District. "The office furniture is still in place, like everyone's just left for the evening. A lot of landlords are throwing it in for free, or at a minimal cost, to make the deal."
In the Washington metro region, data centers account for 5.8 million square feet of space in 53 buildings, reported Peggy Enright of CoStar Group. Of that, 49.1 percent is vacant and ready for direct lease and an additional 5.4 percent available to sublease.
"It's pretty grim, it's bleak," said Tom McBride, research analyst for Grubb & Ellis in Northern Virginia. "Most of the data centers beyond the Beltway in Loudoun [County] were never even occupied. The bubble burst before they could even get in."
Now the buildings sit, McBride said, available for a fraction of what they cost to build. Some suggest the space would make fine space for biotech or manufacturing concerns.
"It depends on what you need," said Keith Lavey, Grubb & Ellis' research director. "Some of the locations have no windows. Some might make perfect sense — there are high ceilings and plenty of parking. They're a cheaper alternative for office users."
Ira Saul, a real estate attorney in Vienna, foresees a spike in the number of subleases. "Whatever you can get for the space, that's found money for the tenant stuck with the space," he said. "You've still got to pay your rent."
Some data-center spaces have found new life, said Andy Schroepfer, president of Tier 1 Research in Minneapolis. He hasn't put together how quickly that's happening or precisely how the space is being used, Schroepfer said, but he expects to release updated hard numbers on the region's glut of data centers sometime in October.
© Copyright 2002 The Washington Post Company |
