Carter Validus Insider Offers Insight Into Key Atlanta Asset at 2018 Data Center Forecast

Apr 10, 2018
by Josh Anderson

ASHBURN, VA – A common topic at CapRE Data Center Summits is turn-key sites. Carter Validus happens to own a building at 250 Williams and now has 100,000+ square feet that they’re looking at from a powered shell perspective. At our 2018 Data Center Forecast East, we welcomed Dallas Whitaker, Chief Portfolio Manager at Carter Validus to a panel about the booming Atlanta data center market, and asked him to share some insider perspective on the facility, as well as why the building is important to Carter Validus’ plans.

data center summit“250 Williams is probably one of the most interesting and exciting real estate deals that I’ve seen in quite a long time,” Whitaker enthusiastically replied. “In 2011 we purchased our first data center which was located in downtown Atlanta, and was called 180 Peachtree. It was one of the core, central connectivity sites in Downtown. We had a great experience and just sold that property at the end of last year. Everyone was very pleased. So when we were able to buy 250 Williams last summer, we were very excited.”

Whitaker did offer a word of caution  — there wasn’t really that much up-side to this opportunity. “Though we were able to increase the NOI at 180 Peachtree, at 250 Williams — we’ve already got a pretty significant upside there,” he shared. “Historically and traditionally, our investment program has really focused on a core, long-term net lease, or absolute net-lease types of facilities, more-so on the colocation side. But we’re also launching funds that are focused on the value-add opportunities, such as enterprise users outsourcing their data center needs and going to colocation or partial sale-leaseback opportunities.”

“At 250 Williams, right now that is an office that is one of original Mart Buildings built in downtown Atlanta by John Portman,” Whitaker revealed. “It was the Technology Mart that ended up becoming the HQ facility for the Atlanta Olympics in the mid-1990s. And as a result, or in connection with that, the fiber connectivity that was installed in Downtown Atlanta is just really superior and robust. So this building benefits from having extreme infrastructure in place from what it was built to be originally, which was not a data center.”

However, that’s not all.  “It also has connectivity,” he added. “And right now, about 55% of the occupancy are office tenants and 30% is data center tenants. But about 60% of the revenue, the NOI in the building, comes from the data center tenants. When we bought the building, it was 87% leased and there was something in the neighborhood of 130,000 square feet of vacant space.”

Whitaker then shared that Carter Validus’ plans are now to enhance the infrastructure from a power perspective “This way, we can provide powered shell lease-up opportunities for about 100,000 square feet,” he concluded. “Which we think will hit the market at a really good time to take advantage of some additional demand.”

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