Real Estate Investor Combines Data Centers For Nationwide Consistent Services

A real estate investment firm has brought together a couple of its data centers to form a new organization to serve customers coast to coast.

San Jose, Calif.-based Fortune Data Centers and Dallas-based Infomart have been combined into a new single entity, Infomart Data Centers, by their parent company ASB Allegiance Real Estate Fund.

The move, unveiled Tuesday, creates the ability to provide a consistent level of data center services across the country, said John Sheputis, president of Infomart Data Centers and formerly the CEO of Fortune Data Centers.

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Most people pay little attention to who owns a data center or to how thick the walls are, Sheputis told CRN. "They care about the service," he said. "So we are creating a portfolio of companies under one entity with consistent service."

Infomart Data Centers, like many data centers that provide services to multiple customers, is owned by a real estate investment trust (REIT), Sheputis said. For Infomart Data Centers, that owner is the ASB Allegiance Real Estate Fund, he said.

In the past, most data centers were built by venture capitalists or by telecoms and might cost about $10 million, Sheputis said.

"Now it takes $100 million," he said. "Venture capitalists don't want to make that kind of investment. But real estate investors look at the long term."

ASB brought its data center properties into a single entity because it, like Infomart, recognizes the data center market is changing, Sheputis said.

"Customers are asking why we're not in more locations," he said. "They say they have needs in the central and Eastern U.S., and are looking for one national provider to help. They want one property. They don't want a lot of landlords."

After the merger, Infomart Data Centers has data center facilities in Hillsboro, Ore.; San Jose, Calif.; and Dallas. The company also is expanding what used to be AOL's first data center, located in Ashburn, Va., which ASB acquired earlier this year, Sheputis said.

The San Jose, Dallas, and Ashburn facilities are located in areas with a large concentration of customers, Sheputis said.

Hillsboro, on the other hand, doesn't have a lot of data center customers, but it does host the data centers of such companies as Facebook, Amazon, Apple, Rackspace, Google and other companies, Sheputis said. "Oregon offers tremendous cost and geographic advantages," he said. "Silicon Valley sits on fault lines. Oregon doesn't."

Now that ASB has brought its various data center facilities under a single entity, it is looking at potential expansion opportunities, Sheputis said. "Look for an announcement from us in the second half of 2015," he said.

PUBLISHED OCT. 7, 2014