Digital Realty is set to acquire 49 percent of Clise Properties’ 50 percent ownership interest in the Westin Building Exchange in Seattle. Located at 2001 Sixth Ave., the 34-story tower is a primary interconnection hub for the Pacific Northwest, linking Canada, Alaska and Asia along the Pacific Rim. It is home to leading global cloud, content and interconnection providers and houses more than 150 carriers and more than 10,000 cross-connects.
The exchange connects to multiple trans-Pacific cables, including Hawaiki and Southern Cross, has direct connections to the vast majority of Canada and is home to the Seattle Internet Exchange. The building also is adjacent to Amazon’s 4.1 million-square-foot urban campus.
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Clise Properties developed the 400,000-square-foot tower as an office building around 1980, in a partnership with Westin Hotels (the anchor tenant at that time) and Hadley Properties. Clise converted the building into a carrier hotel in 1995.
Digital Realty had already owned a 50 percent interest in the Westin Building Exchange since 2006, Rafal Rak, vice president, Portfolio Management for the West Region, told Commercial Property Executive. He added that Clise Properties retains a 1 percent interest in the asset.
The transaction is subject to customary closing conditions and is expected to close in the first half of this year. On closing, Digital Realty will assume management and operational oversight for the facility.
Big Deals in a Hot Field
Digital Realty was part of an outsized deal last fall, when it and affiliates agreed to sell a multi-state portfolio of 10 data centers, totaling 1.4 million square feet, to Mapletree Investments Pte. Ltd. and Mapletree Industrial Trust, of Singapore, for about $557 million.
In the second part of that transaction, the Singaporean companies, through a jointly owned entity, agreed to buy an 80 percent interest in three fully leased hyper-scale data centers owned by Digital Realty in Ashburn, Va., for $811 million. Digital Realty was to retain 20 percent ownership.
Seattle high-rises notwithstanding, much of the U.S. data center market remains centered on a handful of metros, primarily Atlanta, Chicago, Dallas-Fort Worth, metro New York City, Northern Virginia, Phoenix and Silicon Valley, according to a 2020 outlook from CBRE. Among those seven, NoVa accounted for more than half of the capacity under construction.
With more than 120MW of preleased capacity delivered by year-end, 2019 is expected to have tallied record absorption, according to CBRE.