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The largest commercial real estate publication in the United States.
January 11, 2012  
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Did you vote for Herman Cain last night? It may be time for a political crash course. We've got two political insiders tomorrow, Ann Compton and Linda Douglass. Last chance to get on the list. See you tomorrow morning! Sign up now.

Northern VA data centers continue to burn it up. (Literally—that's why they have cooling systems.) We've got an event on the subject coming up, so we asked a few of our expert panelists for the latest trends in this hot sector.
JC Boggs, Blank Rome
Up first: Cloud computing, which "holds tremendous potential to deliver value," Blank Rome partner JC Boggs tells us. It's fueling the data center consolidation Jim mentioned because cloud technologies reduce the number of applications hosted within government-owned data centers. Feds are still working on establishing standards for the transition. Even so, the business of storing, managing, and securing information promises to grow exponentially for the foreseeable future, JC says, with big benefits for the DC market.
Green Earth 1
Jim Flyzik
Consolidation isn't as easy as it sounds—former Treasury Department CIO Jim Flyzik (who hosts his own radio show) tells us budget issues could be problematic for the government's plan to close 800 data centers. “If an agency wants to shrink its total number of centers, it's unlikely they have an existing center to accommodate the additional capacity,” he says. “That requires investing money in something that can.” Potential solution: Agencies acquiring data center management services from the private sector, just like they lease office space.
Terremark, Ben Stewart
There's also the question of what it takes to run a data center. Energy efficiency is the name of the game for operators, says Terremark's Ben Stewart—take a look at the bill if you're wondering why. One Terremark-owned center in Miami costs $1.1M per month to power, he tells us, and new construction can run up to $1,500/SF. Even a slight efficiency increase can equal big savings. How he's saving on cash: reduced shaft speeds for motors, containment chambers for hot air, and using cold air (instead of water) to cool centers.
Dave Ritchey, CBRE
Conditions seem promising. Demand (1.5M SF in net absorption since '09) has consistently outpaced deliveries over the past three years, CBRE data center guru Dave Ritchey tells us. Over 600k SF of new development is in the pipeline, catering to a wide variety of users, including feds, financial institutions, and technology companies. This year, he expects demand to maintain a steady pace in NoVA, thanks to continued growth from these same industry sectors. His recipe for success: “Market intelligence is key.”
Our other all-star panelists: DuPont Fabros Technology CEO Hossein Fateh, Himes Associates founder Paul Himes, DH Capital's Marty Friedman, Loudoun County's Buddy Rizer, HITT's Ross Rebraca, DBT-DATA founder David Tolson, Digital Realty Trust's Scott Morrow, and RagingWire's Daniel Golding. Join us on Feb. 3. Sign up now!

Institutional Borrowers Heart Banks
Cassidy Turley, John Campanella, Paul Spellman
Yesterday, Cassidy Turley announced it locked down a domestic bank perm loan for CBRE Investors-owned One Washingtonian Center in Gaithersburg. “Banks are more willing to do shorter-term, floating-rate deals like this one, allowing for greater flexibility,” Cassidy Turley's John Campanella (left, who worked on the deal with colleague Paul Spellman) tells us. “That flexibility is driving more institutional borrowers to banks.” Contrast that with life companies, he says, who have been more cautious on structure as of late.
One Washingtonian Center
Here's One Washingtonian Center. Generally speaking, lenders remain conservative, and leverages typically top out around 65% LTV. The same goes for pricing: Loans similar to the Washingtonian were priced around 200 bps over LIBOR early last year, with spreads increasing to 250 to 300 bps over LIBOR by year's end.

The Washington Post reports that Nike will occupy Barnes & Noble's old space in Georgetown at 3040 M St. There are currently no Nike or Niketown stores in the metro area, although there are factory outlets in Anne Arundel, Loudoun, and Prince William Counties. Does this mean SB Dunks will replace Top Siders as the G'town shoe of choice?

Fairfax Targets FBI
Fairfax County
As Bisnow first reported in December, GSA's warehouse site in Springfield could be the FBI's new home. But there's also room at Andrews Air Force Base. Fairfax County leaders agreed yesterday to send letters to Virginia's congressional delegation and GSA and FBI officials urging them to bring the law enforcement agency to the site, says the Washington Business Journal. Stay tuned for updates on FBI's search; if you have any tips, leave a small chalk "X" on a newspaper box outside the Mt. Vernon Square Starbucks. Or email our DC reporter.

Luxury Apartments in Southern MD
To prove that we're not one of those inside-the-Beltway pubs you keep hearing about on Fox News, here's an ex-urban deal for you: Greystar's Kevin Sheehan tells us his firm recently started construction on a 240-unit luxury apartment complex, above, in St. Mary's County, MD. It's close to the Patuxent River Naval Air Station, as well as some new commercial and retail development underway. The units will deliver in August '12. Now can someone give us a ride back to DC? Apparently there's no Metro stop in St. Mary's.
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