Digital Realty Buying Two New Jersey Properties

Last week we noted the strong data center activity in central New Jersey, particularly in Piscataway and Franklin townships. Things are getting even hotter. Digital Realty Trust (DLR) has signed contracts to buy two properties for conversion to data centers, one in Piscatway and one in Franklin Township, according to a recent SEC filing.

On Nov. 26 Digital Realty signed an agreement to buy 365 South Randolphville Road in Piscataway, NJ for $20.2 million. The includes an existing 270,000 square feet building, which includes 260,000 square feet of industrial/warehouse space once used by the Simmons Bedding Co., and about 10,000 square feet of office and other space. The acquisition is expected to close this month, and will be financed with borrowings from Digital's revolving credit facility.

On Dec. 6, 2007, Digital Realty signed an agreement to buy 650 Randolph Road for $10.9 million., a property located in northern New Jersey for approximately $10.9 million. The property, which is currently under development, totals approximately 128,000 square feet. The company says it expects the deal to close in April, and also be financed through its revolving credit facility.

Last month an affiliate of Morgan Stanley bought land in Franklin Township, N.J. for a backup data center for the New York-based financial services firm. Morgan Stanley Management Services II Inc. paid $12.3 million to purchase 17 acres of land from the J.G. Petrucci Company.

Morgan Stanley's project has been in the works for two years, and will join several other data center projects in the area bordering Rutgers University in central New Jersey. The Bank of New York also has a data center in Franklin Township, while Savvis Inc. (SVVS) and AT&T (T) lease space in Digital Realty's building in Piscataway.