Seattle-based data center developer and provider Sabey has gained control of a large property in Manhattan, planning to convert it into commercial data center space.

Sabey announced on 7 June that it has invested US$120m in principal interest in the 32-story tower at 375 Pearl St. in lower Manhattan. Other interest holders in the property include developer Youngwoo &Associates, as well as Verizon.

The announcement comes at a time when high-quality data center space in New York City is scarce. The situation sharpened when Google took all available space (besides retail) at a major carrier hotel it recently bought off the market ÔÇô information that commercial real estate advisory Grubb &Ellis made public in May.

The most recent large pieces of data center real estate to come to the Manhattan market were leased out at high rates, following "bidding wars", Grubb &Ellis's Michael Mandel wrote in a blog post.

Sabey's new property is one of the biggest opportunities in the market, according to Mandel. Its previous owners were M &T Bank and Taconic Investment Partners.

The Seattle developer plans to rebrand the property as Intergate.Manhattan, and focus the 1m-sq-ft tower on technology space. Sabey said it would outfit the property with all new core infrastructure and expand its network connectivity.

The developer plans to increase its power capacity from the current 18MW to 40MW.

The plan is to launch the property in early 2012.

The company's president John Sabey said in a statement the property was crucial to Sabey's expansion because of its position at the "confluence" of transatlantic cable and fiber routes.

"We are delighted to provide an essential service for both existing requirements and the growth of new scientific, academic and medical research centers in a resurgent lower Manhattan and to be part of its ascendance as a world capital for data-based enterprises of all types," Sabey added.

Sabey plans to provide both turn-key data center space and shell space for clients wishing to build out their own infrastructure.

According to Mandel, initial plans include four floors of turn-key space ÔÇô 36,000 sq ft per floor ÔÇô and nine floors of shell space.

The building was purpose-built in the mid-1970s for New York Telephone, now a Verizon subsidiary. Verizon will continue occupying three floors it still owns.

Judging by Sabey's news release, the building's tenant base will not be limited to data center operators. The company said the building's floor plates, layouts and clear heights were ideal for data centers and for biotech research facilities, as well as "other critical environments."

The building on Pearl St. was one of three properties Grubb &Ellis's Mandel listed as new opportunities in the Manhattan market. The other two are SoHo CoLo at 121 Varick St., which is initially offering six floors (13,250 sq ft each) for data center space, and 60 Hudson St.

Grubb &Ellis represents the owner of SoHo CoLo in seeking data center tenants for the property.

The carrier hotel at 60 Hudson has traditionally been occupied by telecoms, but Mandel wrote there were rumors that a potential buyer was in negotiations to acquire 240,000 sq ft of space available there ÔÇô space that could potentially be converted into high-density data center space.