Digital Realty Will Buy Controlling Stake in Seattle’s Westin Building

Feb. 13, 2020
Digital Realty will acquire a majority interest in the Westin Building Exchange in Seattle, the primary interconnection hub in the Pacific Northwest. The company says the deal will strengthen its interconnection business.

Digital Realty will acquire a majority interest in the primary interconnection hub in the Pacific Northwest, the company said today. Digital Realty has reached an agreement with Clise Properties to acquire a 49 percent ownership in the Westin Building Exchange in downtown Seattle, a carrier hotel that links data traffic around the Pacific Rim.

The Westin Building is the sixth-most densely interconnected facility in North America, according to Digital Realty, housing more than 150 carriers and content providers and more than 10,000 cross-connects. The 34-story tower is adjacent to Amazon’s 4.1 million square foot urban campus and overlooks Elliott Bay as well as the downtown Seattle skyline.

Digital Realty bought 49 percent of the building back in 2006, so the transaction announced today will provide it with a 98 percent ownership of the building, with the balance being retained by Clise.

The transaction is expected to close in the first half of 2020. Upon closing, Digital Realty will assume management and operational oversight for the facility.

The deal will give Digital Realty greater control over the property, including the ability to deploy space and services for its own colocation and interconnection businesses, a key goal of the company’s PlatformDIGITAL initiative launched in November.  PlatformDIGITAL uses repeatable “fit-for-purpose” data center footprints designed to solve common challenges faced by enterprise colocation customers.

“This linchpin asset gives us the opportunity to fully leverage our robust business infrastructure and open up a full suite of enterprise IT solutions to our global customer base,” said said Digital Realty Chief Executive Officer William Stein. “This transaction further strengthens our interconnection platform and demonstrates our commitment to accelerating digital business on PlatformDIGITAL.”

The Meet-Me-Room inside the Westin Building Exchange in Seattle. (Photo: Digital Realty)

Digital Realty is one of the world’s largest operator of mission-critical facilities, with more than 200 facilities across 35 global markets. The platform launch reflects the growing sophistication of data center customers and the service providers that support them.  As we’ve noted in our recent coverage, the digital transformation will drive innovation on the customer-facing front end and industrialization on the back end.

The deal reflects the more active investment environment for carrier hotels – multi-tenant data centers located in the central business districts of major cities, serving as critical connectivity hubs. Digital Realty is a veteran investor in these “Internet gateway” properties, but now has company in the form of Netrality, which was recently acquired by Macqurie Infrastructure Partners and is seeking to acquire additional carrier hotels to expand its network.

Digital Realty did not disclose the price it will pay Clise for the expanded ownership position, but it will likely be more than the $30.2 million the company paid for the 49 percent stake it bought in 2006.

About the Author

Rich Miller

I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

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