Asset management firm JLL has closed the sale of a carrier hotel, data center and office block to 1547 Data Center Real Estate Fund II and fellow investment management firm, Harrison.
Located in Portland Oregon’s West End, The Pittock Block, as it is known, was bought by the fifteenfortyseven Critical Systems Realty subsidiary for $326 million - which JLL says was the single biggest asset sale in the state for more than five years.
Data centers welcome
Not far up the road is Hillsboro, home to Intel, and a growing secondary data center market: QTS recently launched the first phase of a 250MW campus in the 100,000 inhabitant town; Facebook has invested more than $2bn in facilities there, and, earlier this year, NTT (formerly RagingWire) expressed its interest in the city when it bought a 47-acre property on which it plans to build a 144MW data center campus.
All were likely attracted to its location between San Francisco and the Midwest, but more so by the state’s alluring tax exemptions for data center operators.
The Pittock Block
The property was named after Henry L. Pittock (1835-1919), a newspaper magnate whose house was situated on the property before it was developed by a consortium of investors including a subsidiary of the Northwestern Electric Company.
The block was first developed into office space and a steam power plant, and was only later converted into a telephone exchange in the mid 1980s, attracting long-distance call providers and later ISPs to what became a carrier hotel.
To this day the 302,200 square foot (28,056 square meter) building contains office space, a data center, telecommunications equipment and retail space, and is one of two primary Internet exchanges in the Pacific Northwest region. Its carrier neutral Meet-Me-Room (MMR) is used by 16 fiber-optic carriers and 179 other service providers.
On the acquisition, Michael Hochanadel, managing director at Harrison Street, said: “Pittock Block represents a rare opportunity to acquire an established interconnection building with significant opportunity for growth.
“The Pacific Northwest continues to be a top destination for end users seeking highly connected data center capacity given its robust telecommunication infrastructure that provides low latency to key high growth markets including Asia. We are excited to expand our partnership with 1547 and acquire a highly strategic facility that will enhance our ability to deliver robust connectivity solutions. We look forward to continuing to identify and invest in critical digital assets.”
1547 CEO Todd Raymond concurred, and said: “Strategically located with direct access to seven subsea telecommunications cables, Pittock Block is a premier telecommunications Internet Exchange for the West Coast and represents the type of asset we are seeking to add to our connectivity-focused platform with Harrison Street.
“We believe there is significant opportunity at Pittock as data center requirements continue to grow exponentially in the region. Our plan is to leverage the strong foundation built by the Pittock Block team and immediately expand data center and colocation capacity while simultaneously investing further into the building’s security and world-class meet-me-room.”
The news follows on the 1547 and Harrison’s joint acquisition of the AH Wells Building, a carrier hotel and data center in Milwaukee, Wisconsin, which they said will serve as a premier network through the Upper Midwest, as well as as a content distribution site.
