GI Partners, a private equity firm, through its TechCore investment vehicle, a discretionary core real estate fund with investment commitments from the California Public Employees’ Retirement System (CalPERS), disclosed operational and financial details, as of year-end 2021, for two single-tenant data centers that it owns in Northern Virginia, which are occupied by Amazon Web Services (AWS). Specifically, the two data centers are located at 7510-7610 Mason King Ct in Manassas, Virginia (Prince William County) and 45360 West Severn Way in Sterling, Virginia (Loudoun County).

Collectively, TechCore’s two AWS-occupied data centers comprise 278.7k sqft and have an appraised value, as of January 2022, of $64.8m, equating to an average valuation of $233 per sqft. Below are further details on each of these data centers:

7510-7610 Mason King Ct – Data Center

TechCore’s 7510-7610 Mason King Ct facility in Manassas, Virginia was built in 1984, renovated in 2011, and comprises 151.8k sqft. Additionally, the data center has an appraised value, as of January 2022, of $33.8m, equating to a valuation of $223 per sqft.

The data center is 100%-leased to Amazon Data Services, Inc., a subsidiary of Amazon, with a lease expiration in February 2026, implying a weighted average remaining lease expiry (WALE) of 3.9 years. Notably, Amazon Web Services (AWS) refers to 7510 Mason King Ct as IAD11 and 7610 Mason King Ct as IAD24.

Financials

For full-year 2021, the 7510-7610 Mason King Ct data center generated effective gross income (EGI) of $1.61m and net operating income (NOI) of $1.28m. In turn, AWS is effectively paying $10.61 per sqft to lease the 7510-7610 Mason King Ct data center. Below is a historical comparison of the data center’s financial performance for 2019, 2020, and 2021:

Financial Metric201920202021
Effective Gross Income (EGI)$1.61m$1.66m$1.61m
Expenses-$0.35m-$0.38m-$0.33m
Net Operating Income (NOI)$1.25m$1.28m$1.28m
Gross Rent per sqft$10.58$10.94$10.61

Finally, the 7510-7610 Mason King Ct data center’s NOI of $1.28m and appraised value of $33.8m implies the property is being valued at a 3.78% cap rate.

45360 West Severn Way – Data Center

TechCore’s 45360 West Severn Way facility in Sterling, Virginia was built in 1976, renovated in 2011, and comprises 126.9k sqft. Also, the data center has an appraised value, as of January 2022, of $31.0m, equating to a valuation of $244 per sqft.

The data center is 100%-leased to Amazon Data Services, Inc., a subsidiary of Amazon, with a lease expiration in October 2025, implying a WALE of 3.5 years. Notably, Amazon Web Services (AWS) refers to 45360 West Severn Way as IAD10.

Financials

For full-year 2021, the 45360 West Severn Way data center produced effective gross income (EGI) of $1.49m and net operating income (NOI) of $1.17m. In turn, AWS is effectively paying $11.76 per sqft to lease the 45360 West Severn Way data center. Below is a historical comparison of the data center’s financial performance for 2019, 2020, and 2021:

Financial Metric201920202021
Effective Gross Income (EGI)$1.44m$1.44m$1.49m
Expenses-$0.29m-$0.28m-$0.33m
Net Operating Income (NOI)$1.15m$1.16m$1.17m
Gross Rent per sqft$11.33$11.37$11.76

Finally, the 45360 West Severn Way data center’s NOI of $1.17m and appraised value of $31.0m implies the property is being valued at a 3.76% cap rate.

Right of First Offer – Amazon Web Services (AWS)

Prior to either the 7510-7610 Mason King Ct or 45360 West Severn Way data centers in Virginia being marketed for sale, Amazon Web Services (AWS) has a right of first offer (ROFO) to purchase the properties on terms that TechCore (GI Partners and CalPERS) intends to market the property. Furthermore, if AWS declines the ROFO to purchase the properties, TechCore cannot sell the facilities at a purchase price that is 7.5% lower than the price quoted to AWS.

Additionally, in the event that TechCore receives an unsolicited third-party offer to purchase either the 7510-7610 Mason King Ct or 45360 West Severn Way property, AWS also has a right of first refusal (ROFR) to purchase the properties, on terms that match such offer.

TechCore Sponsors – GI Partners and CalPERS

TechCore, LLC is a subsidiary of GI Partners which functions as a core investment vehicle for technology-advantaged real estate in the United States. Specifically, this includes data centers, carrier hotels, corporate campuses for technology tenants, and life science properties.

To-date, GI Partners has invested in 3+ million sqft of core technology-advantaged real estate for TechCore. Particularly, these investments include acquisitions of 11525 Main Street in Broomfield, Colorado; 9911 Belward Campus Drive in Rockville, Maryland; 850 Winter Street in Waltham, Massachusetts; Liberty Park at Tysons in Vienna, Virginia; and CoreSite-occupied One Wilshire in Los Angeles, California.

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