Introduction

Matt Carolan
JLL

Why Data Centers Arent Going Away

15

petabytes of new data created every

day (1 petabyte = 1 million gigabytes)
o
o
o
o

90%

Over 145 billion emails sent per day

281 petabytes of informa2on in 1986

471 petabytes in 1993
2,200 petabytes in 2000
65,000 petabytes in 2007 (the
informa2onal equivalent to every person
exchanging 6 newspapers-worth of
content per day)

of todays digital data created in

past 2 years (Source: IBM)

By 2015 the gigabyte equivalent of all

movies ever made will cross global IP
networks every 5 minutes
(Source: Cisco)

Over 100 hours of new video is

uploaded to YouTube every
minute

75%

of data today is generated by

individuals, but enterprises will
have some liability for 80 percent
of it at some point

20 typical households generate

more Internet trac than the
enNre Internet in 2008

Supply & Demand

Sean Reynolds
JLL

Andy Cvengros
JLL

Major Data Center Markets

SeaNle

Secaucus,NJ

Chicago

San Francisco

Ashburn
Virginia

Los Angeles
Phoenix

Atlanta
Dallas
Houston
o $1.95B in Construc2on Investment
o 160 MW of Capacity

Whats New in Chicago

July 10, 2014

QTS Enters Chicago Market with Former Sun-Times Plant Acquisition
Data Center Knowledge
April 9, 2014
Forsythe building $130 million data center in Elk Grove
Daily Herald
March 15, 2013
Ascent Plans Third Chicago Data Center Build
Daily Herald
November 7, 2013
DuPont Fabros Buys Land for Expansion in Chicago
Data Center Knowledge
January 20, 2014
BYTEGRID Acquires Facility In Chicago Suburb
Data Center Knowledge

Data Center Supply

3.3M

Chicago supply is
3.3 million sf
(420 megawaVs)

1.3M

Supply projected to increase

by 1.3 million sf (200
megawaVs) in 2015 / 2016

50%

50% delivered in suburbs

(DuPont Fabros, Ascent, Digital
Realty and Forsythe) and 50%
downtown (Ascent and QTS)

39%

20%
50%
Rent

Increase in supply

20% local rent reducNon

50% naNonally over the past
24 months in some cases

Rent for 1MW client

dropped from $180-$210/
kW + E in 2012 to $145-
$165/kW + E today

Data Center Demand

22 MW
Users geeng out of
the business of
owning, operaNng &
building data centers

Users want
increased exibility
with access to
services

Tier III is the

baseline,
marketability is key

23 MWs of tenant
demand in the
Chicago Market

22 MWs of
absorpNon in the
past 18 months

Downtown Chicago
Data Center Market

Suburban Data
Center Market

Supply/Demand Recap
$1B in new builds
sparking increased
demand locally and
na2onally

Reduced rents
and greater
concessions for
tenants

Flexibility is
equally as
important as rent

Data Center Design

Paul Schlattman
ESD

Whats Driving Data Center Activity?

TOP

Reasons for Data

Center Ac2vity

1.

Energy Eciency
Driven by PUE and Cost of Opera2ons

2.

Security
Disaster Preven2on: Natural &
Man-made

3.

Power Capacity
New Technology and New Criteria for
Power (150 w)

4.

VirtualizaNon
Cloud and Consolida2on

Energy
Eciency

Virtualiza2on

Why are
companies
expanding
Data Centers?

Power
Capacity

Security

The Perfect Storm

Data Center Trends

Other Trends within the Data Center Industry

o
Colloca2on and Wholesale Another
Outsourcing 1990s, especially within
name for Outsourcing?
the Financial and Banking Industry
o
BIG DATA Managing and Mining
Containers Not new! Originally
hundreds of applica2ons and/or
introduced by Comdisco in the 90s
Managed Services Outsourcing again, Core
B usiness
i s
T echnology

o
Cloud
in the millennium?

o
o
o

The primary theme within data

center trends is outsourcing
focused

Uptime Tier Rating

Tier 2

Tier 1

Generator in place as back up

(N+1)

No Generator (N), very

vulnerable

3
Tier 3
Two Generators in place, dual
electrical paths, concurrently
maintainable

4
Tier 4
Dual everything

The New Data Center Programming

Approach | Colocation
Program
Interviews

Data Center
Site Surveys

Analysis
TCO

Final Report

Recent Programming Requirements

! Growth Ra2os of 4-6% Annually among Enterprise
! Average kW per rack has grown from 4 kW to 12 kW
! Discussions around Public and Private Cloud
are beginning to occur

What Are Clients Looking for in Design?

Financial
Enterprise

o
o
o
o
o
o

Reliability
Security
Disaster Recovery
Scalability
Cloud
Lower PUE

Cloud-
Internet

o
o
o
o

Large U2lity Power

Security
Renewable Energy
Speed-to-Market

Coloca2on

o Cost Eciencies
o Scalability
o Lower PUE than
compe2tors
o Compe22ve Edge

Associated Risks During the Lease

Life Cycle | Colocation
Associated Risks during the Lease Life Cycle - Wholesale
Operating
Risks during
UPS
replacement

Risk Level 0 - Lowest

Risk Level 5 Highest

Risk Level 5
*Does not include
changes in technology

Risk Level 4
Risk Level 3

End of Life on
Major
Components

Risk Level 2
Risk Level 1
Risk Level 0
Initial Risks in
design,
construction,
and CX

5 Year

10 Year

15 Year

20 Year

25 Year

30 Year

Getting to Total Cost of

Ownership | TCO
Coloca2on

o
o
o
o

Rent Rate
Cost of Power
SLA (Up2me)
Infrastructure Risk

VS

Cloud

o
o
o
o

Public (Amazon)
Private
Reduc2on of kW
SLA - Risk

VS

Own

o
o
o
o

Scheduling
Cost to Own (OPEX)
Capital Expenditures
Security

Deal Structuring

Data center options & what it means in terms of risk

Mike Rechtin
Quarles & Brady

Players Involved
IT

Real Estate

Financial/
accounNng

Legal

-In-House
-Outside Counsel

Brokers

Consultants

Colocation: Retail
o Cage/rack/power whip
o Shared cri2cal infrastructure
o Master Services Agreement/
Service Orders grants a license
o Managed services
o Service Level Agreement

Colocation: Wholesale/Turnkey
o Suite/pod/cage
o Metered power
o Poten2al for dedicated infrastructure
o Lease
o Powered shells
o Turnkey
o Capital alloca2on/Tenant Improvement
Allowance
o Service Level Agreement

Build-to-Suit
o
o
o
o
o
o

Single-tenant facility
Long-term Lease
Dedicated infrastructure
Expansion rights
Purchase op2on
Service Level Agreement/ongoing
Landlord involvement

Sale Leaseback
o O balance sheet nancing
structure
o Sale Agreement
o Long Term Lease
o NNN
o No Service Level Agreement

Thank you
Matt Carolan

Andy Cvengros

Sean Reynolds

JLL

JLL

JLL

Mike Rechtin
Quarles & Brady

Paul Schlattman
ESD