Dallas - Fort Worth Data Centers find the sweet spot of fiber and electricity



The first thing Martin Peck noticed about an acquisition opportunity along Stemmons Freeway was an electric power substation that adjoined the property to the north. For the managing director of Lincoln Rackhouse (the data center division of Lincoln Property Co.), access to power is always a big deal. Then a consultant Peck hired came back with findings that showed the property was sitting at “groundzero” for fiber optics. “It’s a double Bingo,” the consultant said.

Peck connected with Pete Marin, president and CEO of T5 Data Centers, with whom he had collaborated on a big data center project in Plano. Lincoln and Atlanta-based T5 worked out a deal to acquire the building (the former Cabana Motor Hotel), and they’re now preparing to develop the fi rst “purpose-built” urban data center in Texas on the site. 899 Stemmons will range between eight and 12 stories and be built in two phases. Peck and his team at Lincoln Rackhouse are overseeing leasing. The project is being designed by Dallas-based Corgan, a data center pioneer. Dan Drennan, principal at Corgan’s critical facilitiesstudio, said 899 Stemmons is designed to withstand high winds and answer other “what if’s” that are asked of these types of buildings.

Both Peck and T5 president Pete Marin are longtime industry leaders. Here, they weigh in on the North Texas data center market, and what makes it stand out.

PETE MARIN: Along with the central location and access, there’s the weather; you don’t have to deal with cold weather like you do in markets like Chicago. Additionally, the southern loop of the transcontinental fiber that goes across the country goes right through Dallas—right where we are talking about. That connectivity is very important. Texas also has its own separate power grid. This business is built on fear; even if the rest of the nation’s power grid goes down, Texas is still lit. Another great advantage is the cost of power, which continues to drop in Texas. We’re currently locking in rates of 4.1 cents per kilowatt hour, which equates to an all-in rate in the low 5 cents per killowatt hour.

MARTIN PECK: That compares to 11 cents in northern New Jersey and 8 cents in northern Virginia. The reasons that Dallas has one of the most robust economies in the country right now are the same reasons data centers are flourishing. Add on top of that the fact that Dallas is one of the most “lit” cities from a fiber perspective in the southern United States, and of course our cost of power. That’s the main driver of expense to data center users, so they are very keen on even the most minor changes in the cost of electricity.

MARIN: The data center business and data in general are expanding exponentially. A slowdown is nowhere in sight. Continued expansion is easily going to take place for the next five years.

Property Type: