IOREBA HOLDS EVENT FOCUSING ON DATA CENTERS: NEW JERSEY HAS KEY ADVANTAGES
Discussion of Industry Trends, Tours of Sentinel Data Centers’ NJ1 Facility highlight October Event
SOMERSET, N.J. – November 2, 2011 – (RealEstateRama) — With strong interest in New Jersey’s data center market, members of the Industrial and Office Real Estate Brokers Association of the New York Metropolitan Area Inc. (IOREBA) received a detailed briefing on the state of the market and an inside look at one of the region’s newest Data Center facilities. The program on data centers was presented at Sentinel Data Centers’ NJ1 facility in Somerset, N.J.
“Many people in the commercial real estate industry have never been through a data center previously, and we thought this would be very appealing to our members and guests,” said David Simon, managing principal of Cassidy Turley, New Jersey, and 2011-12 president of IOREBA, while introducing the program. “The event generated tremendous interest and was received very well. IOREBA’s primary objectives are to promote networking with other commercial real estate professionals and offer an educational component. This event clearly accomplished these goals.”
The program followed guided tours by Sentinel executives of NJ1, a multi-phased facility that will encompass 330,000 square feet when fully developed and comprise 160,000 square feet of computer room space. “New Jersey has the second largest concentration of data centers in the U.S., after California,” noted panel moderator Sean Brady, senior director and co-founder of Global Data Center Advisory Group of Cushman & Wakefield, Inc. and immediate past president of IOREBA, kicking off the panel discussion.
Data center space in the Garden State consists of enterprise and wholesale co-location facilities, noted Michael Pembroke, senior vice president-leasing and marketing for Russo Development, who is partnered with Sentinel on the NJ1 facility. “Enterprise space is purpose-built to very specific requirements and requires a lot of time and capital to complete. It can take 18 months or more, and the cost can be three times that of a typical office building,” stated Pembroke. “However, it continues to be in demand, attributed to overall economic conditions and the hesitancy for companies to construct their own space.”
Companies requiring data center space often seek co-location facilities,” noted Josh Rabina, co-president of Sentinel Data Centers. “Wholesale co-location is a relatively new class of real estate that can often provide the autonomy and quality of a stand-alone facility but with a lower occupancy cost and greater flexibility.”
Demand is coming primarily from financial, healthcare, and energy companies,” Rabina said. “And our industry relies heavily on the real estate brokerage community to source deals. Sentinel believes value drivers for large co-location facilities include economies of scale in construction and operations, and a simple, real estate type business model that does not embed costs of IT services in monthly rental costs.”
“When the brokerage community is involved, they need to fully understand the tenant needs,” suggested Michael Silla, director of strategic development for Concept CSI, a design-build firm for mission-critical facilities. “Sit down with the client, understand the dynamics, and form an alliance with a professional services firm specializing in data centers. This is critical in helping to streamline the process.”
NJ RANKS 2ND NATIONALLY IN DATA CENTERS
“There is pent-up demand for data centers in New Jersey. Just about every company is evaluating their need to upgrade them to save money over the long term,” Brady noted. “They are expensive to build, upgrade and maintain, and because of the recession, companies were holding off from making commitments.”
Echoing the fact that New Jersey ranks second nationally in data centers, Pembroke tied this point to the metropolitan area’s high concentration of financial services and pharmaceutical companies. And while New Jersey’s power costs are relatively high compared to other parts of the country, “they are lower than New York, Long Island, and Connecticut.”
“There are more viable sites in New Jersey than in other parts of the region,” Brady added, noting that eight of the 10 largest banks and financial institutions have data centers in the state. “The availability of power, water, fiber and building supply is a home run for New Jersey in this sector. These are clear advantages over the competition.”
With roots dating back to 1927, IOREBA is one of the nation’s largest regional commercial real estate groups, growing to more than 300 members conducting business in New Jersey, New York, Pennsylvania and Connecticut. The organization has continually expanded its offerings, designing more useful programs, and teaming with co-hosts for several events to improve the networking environment. To assist members in difficult economic times, IOREBA has also cut costs for events and membership to ensure that members are able to take full advantage of everything the organization has to offer.
If you would like to become a member, visit www.IOREBA.com for an application and instructions. If you have any questions, please e-mail David Simon at david.simon (at) cassidyturley (dot) com.
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