It's a week for the sale of data centers, or so it seems. DuPont Fabros yesterday revealed plans to sell its giant facility in Piscataway, New Jersey.
DuPont Fabros is making a move away from retail colo, preferring to focus on the largest sort of customer instead. The company says that its NJ1 facility is best suited for the retail business, and therefore will be better utilized by another owner. They'll instead be working on expansion projects in Toronto, Portland, and Phoenix of a more wholesale nature.
NJ1 features some 360,000 square feet of potential space, 88,000 of which was fully built out in the first phase fed by 18.2MW of power available for customers. Some 70% of that space has been leased so far, and they've struggled to fill it relative to their biggest campus down in northern Virginia. In Q3 of 2011 for instance, some 34% of NJ1-phase1 was leased while 8% of ACC6 was leased, but ACC6 was full a year later. DuPont Fabros will take a $115-135M impairment charge in their Q4 2015 results as a result of the move.
As for who might buy the huge, modern facility from DuPont Fabros, any number of candidates springs to mind. Probably a fellow data center REIT, although it doesn't have to be one of the bigger ones. Private equity could definitely play a role as well. Basically, anybody except a large telco like Verizon or AT&T or CenturyLink, as those guys seem to be fleeing the space.
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