Tuesday, May 28, 2013

Data Center Landlords Double as Energy Brokers

Landlords Double as Energy Brokers - Bland New Jersey buildings are commanding rents four times as high as Class A high-rises in Manhattan, but it isn’t the space that attracts. It’s the electrical capacity.

North Jersey Data Center Industry Blurs Utility-Real Estate Boundaries - NYTimes.com: "But the capacity pricing by data centers, which emerged in interviews with engineers and others in the industry as well as an examination of corporate documents, appears not to have registered with utility regulators. Interviews with regulators in several states revealed widespread lack of understanding about the amount of electricity used by data centers or how they profit by selling access to power. Bernie Neenan, a former utility official now at the Electric Power Research Institute, said that an industry operating outside the reach of utility regulators and making profits by reselling access to electricity would be a troubling precedent. Utility regulations “are trying to avoid a landslide” of other businesses doing the same. Some data center companies, including Digital Realty Trust and DuPont Fabros Technology, charge tenants for the actual amount of electricity consumed and then add a fee calculated on capacity or square footage. Those deals, often for larger tenants, usually wind up with lower effective prices per square foot."

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