Equinix to Build in Virginia, San Jose

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The cages housing customer equipment inside an Equinix data center.

Equinix, Inc. (EQIX) will build new data centers in northern Virginia and San Jose, Calif., boosting the company's footprint of colocation space in two of the nation's hottest markets. The company will invest $100 million in each of the facilities as part of its ongoing $1.4 billion program to expand in 15 global markets. Both the data centers will be "greenfield" builds from the ground up, allowing the centers to be designed with the latest advances in efficiency.

The new data centers will add crucial inventory in two markets that have strong demand but limited supply due to the credit crunch, which has curtailed or postponed many projects. The decision validates the strength of demand in both markets, as Equinix has been careful in its decisions about where and when to build new facilities.

Space Tight in Both Markets
“As we expect to reach capacity within our existing Washington, D.C. and Silicon Valley area centers sometime in 2010, these newly announced projects will enable us to accommodate increasing customer growth,” said Steve Smith, president and CEO of Equinix. “The investments we made years ago in purchasing land adjacent to our existing centers in these markets has given us significant flexibility in our expansion strategy."

The Virginia facility will be the sixth data center at the company's huge data center campus in Ashburn. The 152,000 square foot data center will add capacity for 1,750 cabinets when it opens in the summer of 2010. Equinix expects to invest $30 million in the project in 2009 and another $70 million in 2010. The Equinix Ashburn campus features more than 470,000 square feet of data center space and access to more than 130 networks, making it one of the Internet's busiest intersections.

The New Silicon Valley 5 (SV5) data center will be built on land owned by Equinix adjacent to the company’s flagship SV1 facility in San Jose. The 170,000 square foot data center will have a total capacity for 2,600 cabinets at completion. Equinix will build out the center in two phases, with a $100 million investment in the first phase, which will have a capacity of approximately 1,000 cabinets when it opens at the end of the third quarter 2010. An additional $45 million is budgeted for a second phase, which will be built as demand warrants.

Relief for Silicon Valley
The San Jose project will bring some long-term relief to a Silicon Valley market facing a potential shortage of data center space. Data center projects planned for Santa Clara, Calif. are now taking a back seat to the red-hot northern Virginia market, where the Obama administration’s stimulus funding and focus on cloud computing are expected to boost data center construction. Since the economic meltdown last fall, plans for more than 1 million square feet of new space in the city have been postponed or placed on hold.