Terremark Identifies Expansion Sites

Terremark Worldwide (TWW) says it has identified data center sites for its planned expansion into the Silicon Valley and Washington, D.C. markets. "Due diligence is in progress," Terremark chairman and CEO Manuel Medina told analysts last week. "We're excited about what wer'e seeing, and we expect to have something (to announce) by the next (quarterly earnings) call."

In June the Miami-based operator of data centers at network access points (NAPs) announced its intention to pursue expansion in the two additional markets, despite the fact that it has filled about 15 percent of the space at its massive Technology Center of the Americas in Miami. Medina said Terremark is scouting locations for "greenfield" projects to build 90,000 square foot data centers in both markets, with a price tag of $55 million to $60 million for each facility.

"We don't necessarily need to own the facility, but if we don't own it, we need to have 100 percent control over the facility," said Medina. "We have a robust business, and we don't expect the catalysts for this market demand to diminish. I don't see any overcapacity at this time. There's a very deep demand for these robust facilities. It's just an explosion. We don't see it slowing down anytime soon, notwithstanding that other competitors are building facilities."

While noting strong overall market growth, Medina said demand was stronger in Washington and Silicon Valley than in Miami, explaining the decision to expand in additional markets while

"There's a still a geography need for some customers where they don't want to go to where your footprint is, so you have to bring the footprint to your customers," he said. "We have some very creditworthy customers who want to have space in (Washingon and Silicon Valley)."