CBRE sells Chandler flagship data center for $72.75M
CBRE represented Lincoln Rackhouse, the data center division of Lincoln Property Co., in partnership with Principal Real Estate Investors, in the sale of a Phoenix-area data center to CBRE Global Investors for $72.75 million.
Kristina Metzger and James McCarthy of CBRE Data Center Capital Markets represented the seller in the transaction. Lincoln Rackhouse and Principal Real Estate Investors purchased the data center in 2018 as part of a three-property portfolio.
“This sale represents a very successful execution of our business plan with Lincoln Rackhouse, and continues a 10-plus year track record of achieving outsized returns for our clients through investment in the data center sector,” said Ben Wobschall, director of acquisitions and dispositions for Principal Real Estate Investors. “The competitive sale process was a testament to the continued evolution of data centers as an institutional asset class.”
Located at 2500 W. Frye Road in Chandler, Arizona, an eastern suburb of Phoenix, the 191,000-square-foot data center is 100 percent leased to a global data center services provider.
“There are more diverse buyers of data center assets today than ever before,” said Kristina Metzger, Leader of CBRE’s Data Center Capital Markets. “The Phoenix Flagship data center was attractive to foreign capital, institutional investors, and infrastructure funds, in addition to the historical, targeted data center investors.”
Phoenix was the second-most active data center market in the U.S. in 2018, with 41.5 megawatts (MW) of net absorption, according to CBRE’s U.S. Data Center Trends Report. Although new supply delivered, wholesale vacancy ended 2018 at 7.8 percent, nearing a two-year low. Metro Phoenix continues to attract data center investment given the region’s power capabilities, business-friendly environment and favorable climate conditions.