Sabey, Young Woo May Buy NY Verizon Building

It's been a year since data center developer Sabey Corp. announced plans to expand beyond its core market in Washington state, armed with $100 million in funding from a pension fund. It appears the company may have found its opportunity in the Big Apple.

Sabey is reportedly working with Young Woo & Associates to purchase a huge former Verizon central office building in Manhattan. The Wall Street Journal says the companies have a tentative deal to purchase the building at  375 Pearl Street from M&T Bank  for about $100 million.

Sabey isn't commenting about its plan. But the property is suitable for redevelopment as data center space, with sturdy floor loads that can support telecom and IT equipment. New York real estate watchers say the building will likely need significant investment.

While this would be Sabey's first foray beyond its Seattle roots, it has a savvy partner in Young Woo, an experienced player in both  the  Manhattan real estate industry and the data center industry. Young Woo's data center and telecom projects include a major financial data center in Carteret, N.J.  and several New York communications hubs at 325 Hudson Street and 85 10th Avenue, where Telehouse has just opened a new colocation facility

375 Pearl Street is a 1.15-million-square-foot office building on the East Side of Manhattan. The 32-story building was originally developed in 1975 for Verizon as a telecom switching hub and has recently served as a back office facility. It was purchased in 2007 by Taconic, which later abandoned plans to redevelop the property. Verizon continues to occupy three floors.

In January 2010 Sabey announced plans to  partner with National Real Estate Advisors (NREA) to form a new venture that will expand Sabey’s data center operations beyond its core market in the Pacific northwest. NREA is a real estate investment management and advisory firm owned by National Electrical Benefit Fund (NEBF), a multi-billion dollar pension plan that provides retirement benefits to employees in the electrical industry.

Sabey has more than 20 years of experience in the data center business and is perhaps the largest provider of hydro-powered facilities in the United States. The company controls more than 1.7 million square feet of data center space in Washington state that will form the nucleus of Sabey DataCenter Properties.

Its properties include the huge Intergate.East and Intergate.West developments in the Seattle suburb of Tukwila and the Intergate.Columbia project in Wenatchee, Wash. Sabey is also building a data center complex in Quincy, Wash. that will be called Intergate.Quincy.