CyrusOne’s Bruner sheds more light on site selection at DICE East
“Site selection” is a bit of a misnomer – it’s never just about the dirt.
That’s one of the messages CyrusOne Vice President of Project Development Lindsey Bruner conveyed at the Bisnow Datacenter Investment Conference & Expo East conference in Washington, D.C.
On Nov. 11, she spoke on the “Strategic Site Selection: Finding opportunity for expansion in the Eastern Region and Beyond” panel, which included Server Farm Vice President of Real Estate Mario Calderone, Evoque Data Center Solutions Vice President of Strategy Drew Leonard, Cushman & Wakefield Vice President of Capital Markets Ben Mann, and Henrico County (Va.) Economic Development authority Business Attraction Manager Twyla Powell.
Moderator Mike Rechtin, a partner with law firm Seyfarth Shaw LLP in Chicago, began the panel by asking what site selection means and what drives its decision-making.
“At CyrusOne, we call site selection ‘project development,’” Bruner noted. “We involve all our internal stakeholders from the very beginning. It’s a collaborative process between the development team, both the site selection and due diligence sides, as well as the design and construction team, our network team and our sales team, to make sure the project we ultimately deliver meets everybody’s needs.”
It’s job that only gets tougher due to constant change, particularly in demand and the economy.
“One of the biggest changes over the past year has been that it’s not just power becoming critical path, it’s supply chain becoming critical path,” Bruner said. “So, working with our procurement team now on the front end, we can have a truly representative delivery date for that project beyond just selecting a square, flat, clean piece of dirt – there’s a lot of factors that go into it.”
Rechtin proposed that primary markets drive demand to secondary markets, and he wondered what CyrusOne’s strategy around that. Bruner explained CyrusOne still focuses on primary markets.
“Digital gateway locations are our bread and butter, so we’re going to focus primarily on the Ashburns [Virginia], the Phoenixes, the Londons and the Frankfurts,” she said. “But I think we’ve seen the different latency requirements and different applications needed to be closer to their end user or farther from their end user or maybe they’re not dependent on latency at all. That’s drives a ton of development in areas like Atlanta, which a few years ago was not a major co-lo market and now you’re seeing a lot of activity there. Every community is going to win, and as data creation, processing and storage grow, there will be data centers everywhere. You might drive by them and not even know they’re there.”
Rechtin followed-up by asking Bruner if CyrusOne does or is potentially interested in doing sale-leasebacks.
“It hasn’t been a strategy for CyrusOne for a while,” she clarified. “We’ve definitely acquired companies that have had assets in places that have been ways for us to enter new markets. That’s how we got into Europe, we bought the Zenium portfolio and took it and expanded it.”
Rechtin also asked the panel about “site unselection,” the notion of paring down a portfolio to exit markets or older sites.
“As more applications move to the cloud, I think you’re seeing that as a way people are getting out of their legacy self-build/self-operated sites,” Bruner said. “They’re able to take the things they were running themselves and put them on somebody else’s cloud and now they’ve got a totally vacant asset, which then becomes a redevelopment opportunity. It’s a brownfield and maybe you’re not able to repurpose that infrastructure. But you’ve got a site with power, which in some markets is the biggest advantage you can have.”
Bruner’s panel appearance at DICE East marked her second in as many months in the Bisnow Dice event series. In October, she was a panelist at DICE South in Dallas, where she joined the “Strategic Site Selection: How Tier II and Tier III Markets are Augmenting the Texas Market” panel. To read more about that panel, click here.