DuPont Fabros sells NJ1, boosting data center consolidation trend

DuPont Fabros Technology (DFT), a wholesale data center operator, is going to sell its NJ1 data center facility in a bid to focus its attention on wholesale data center development in key markets.

Upon completing the sale of the NJ1 center, DFT said it plans to partially fund its expansion into the new markets that are part of its strategic growth plan, including Toronto, Portland, Ore., or Phoenix.

NJ1, located in Piscataway, N.J., is an approximately 360,000 gross square foot facility that is comprised of two phases: NJ1 Phase I contains approximately 88,000 square feet of raised floor area, and has 18.2 megawatts of critical load power, while NJ1 Phase II is available for future development.

DFT has leased 52 percent of the available critical load power and 70 percent of the available raised floor area in NJ1 Phase I.

By implementing this new marketing plan, DFT said it expects to incur a fourth quarter 2015 impairment charge between $115 million and $135 million. 

While this charge will lower DFT earnings per share by $1.41 to $1.66, it will not impact Funds from Operations per share, Normalized Funds from Operations per share or Adjusted Funds from Operations per share, the company said.

The service provider's move comes amidst what has been a busy period of data center sales.

Verizon (NYSE: VZ), according to a Reuters report, is planning to sell its data center assets for $2.5 billion. The telco's colocation assets include 48 data centers, which currently generate earnings of about $275 million.

In addition to Verizon, CenturyLink (NYSE: CTL) said it is looking at strategic alternatives for its data center assets, while AT&T (NYSE: T) has been rumored to have been looking for a buyer of its assets since 2014.

Meanwhile, Windstream completed the sale of its data center business to TierPoint, a data center specialist, for $575 million.

For more:
- see the release

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