Helping Clients with Business Expansion
High-tech clients seeking to purchase property that will enable them to expand their operations regularly look to Holland & Knight to assist them in effectively navigating the issues that accompany high-tech property acquisitions. Clients know that Holland & Knight attorneys come to the table with a thorough understanding of the specific technology business that’s involved.
Digital Realty, headquartered in California, owns, develops and operates more than 100 data centers in North America, Europe, Asia and Australia. As a publicly traded Real Estate Investment Trust (REIT) on the New York Stock Exchange, the company invests in institutional-quality data centers — facilities that house computer systems and related components — at attractive, risk-adjusted returns for its shareholders.
When Digital Realty decided to purchase an existing data center in the heart of San Francisco, it sought counsel from Holland & Knight real estate lawyers with a wealth of knowledge about the intricacies of structuring, negotiating and documenting data center acquisitions and financing. In this instance, the usual complexities of a data center acquisition were compounded by the fact that the company sought to acquire $85 million in both fee and leasehold interests in the property.
Holland & Knight worked with Digital Realty to ensure that all of the fiber optic cables and telecommunications equipment necessary for present and future operations of the property were owned by the seller and would be acquired by the company. Our team also ensured that Digital Realty would have rights to enough power to grow and operate the data center, and that the company would succeed to the seller’s rights in all leases, collocation agreements and other revenue-generating contracts. Finally, we made sure the mortgage lender understood and contractually recognized the characteristics that distinguish data centers from other types of real property, as well as the unique aspects of Digital Realty's operations. The result was a smoothly executed structuring, negotiating and documentation of this sizable acquisition and financing transaction.