As Cassidy Turley’s Johnny Johnson reported for RealPoints last week, San Francisco-based Digital Realty Trust Inc. (NYSE: DLR) has acquired Convergence Business Park, an 819,000-square-foot data center and office project off State Highway 121 in Lewisville. DRT paid about $123 million for the complex, which includes 10 existing buildings on 168 acres. About 40 acres of undeveloped land could accommodate an additional 700,000 square feet of space.
Eight tenants have long term leases at the fully-occupied park. About 35 percent is leased as data center space to three tenants; the balance is leased as office and office-lab space.
Michael Foust, CEO of Digital Realty Trust, said the acquisition will provide immediate cash flow, while providing a range of future development and development opportunities.
“Dallas continues to be a very strong market for us,” he said in a statement. “When combined with Datacenter Park Dallas in Richardson, located approximately 25 miles from this site, we believe that we will be able to accommodate a large majority of the data center requirements from customers seeking space in the Dallas market.”
According to DRT, primary electrical service is provided by Texas New Mexico Power, via a high-voltage utility-owned onsite substation that totals 16.5 megawatts of IT capacity. The provider currently is adding two transformers at the site, which will provide approximately 67 megawatts of additional power.
Scott Peterson, chief acquisitions officer, said DRT expects to generate attractive risk-adjusted returns on its buy. “With the availability of developable land and increased power from the expanding substation, we believe this investment has considerable upside potential,” he said.