July 19, 2016
Netrality Properties, a New York City-based company that owns and operates vital data center facilities across the country, has acquired half a million square feet of data center space from Digital Realty in a deal estimated to be worth at least $50 million.
The deal, which makes Netrality the largest data center operator in the region, includes two facilities: a 400,000-square-foot building at 210 N. Tucker Blvd. and a 100,000-square-foot facility at 900 Walnut St. The two buildings are among St. Louis’ most critical data center buildings and are frequently referred to as carrier hotels — those that serve as access points to the region’s long haul fiber networks thus connecting St. Louis to other places around the world either directly or indirectly.
The buildings were acquired by Amerimar Acquisition Corp, which through a joint venture with Hunter Newby operates Netrality, in a deal that closed July 13.
According to city of St. Louis real estate records, 900 Walnut sold for $23 million. A price for 210 N. Tucker was not available, though the building itself is about four times the size of 900 Walnut.
Netrality also acquired a colocation facility located within 210 N. Tucker from 365 Data Centers. Terms of that deal were not disclosed.
Netrality plans to integrate the operations of the two buildings along with the 365 Data Centers facility under common management.
“St. Louis is a key interconnection point for carriers, service providers and enterprise customers in the region,” said Netrality President and CEO Jerry Marshall.
The buildings had been on the block for at least the last year as Digital Realty looked to unload its data center assets in non-tier-one markets. According to sources familiar with the deal, the divestiture likely represents a loss for Digital Realty, which acquired the facilities from Bob Guller for around $50 million in the 2000s and then invested an additional $75 million to $100 million into upgrading the facilities.
CitiBank provided debt financing on the acquisition, and Ropes & Gray LLP was Netrality’s legal counsel on the acquisitions.
Michael Hochanadel, managing director with JLL Capital Markets, represented Digital Realty in the transaction.