Molson brews up data centre deal

Los Angeles, Calif.-based telecommunications real estate giant Markley-Stearns has purchased a former Molson brewery in downtown Toronto and plans to convert the facility to a multi-tenant data centre by October of this year, Network World Canada has learned.

The company, which has opened 11 other co-location facilities across the world since its inception in the mid-90s, said it is already in discussions to lease out half of the 400,000-sq. ft. Molson building near Toronto’s lakeshore and it expects to reach capacity by the end of this year.

“(Toronto) is one of the most important business markets in North America,” said Jeff Markley, a partner at Markley-Stearns. “And our client base has directed us that there’s a need there. We work with most major clients in the telco sector.”

Markley-Stearns has commissioned architects, Webb-Zerafa-Menkes-Housden Partnership, one of the designers of Toronto’s CN Tower, to undertake the necessary retrofits to the 45-year-old Molson brewery and bottling plant.

“The location and the bones of the building were ideal,” Markley said of the reasoning behind the Molson purchase. “We’re turning the Molson facility into an ideal property to have telco and Web hosting and Internet facilities.”

Neither Markley-Stearns nor Molson’s would confirm what price was agreed on for the sale, but Markley did say his company expects to pay about $40 million to transform the facility into a secure, disaster-proof centre.

The Markley-Stearns data centre will be at least the third major so-called “telco hotel” to be announced this year in Toronto.

Mammoth Web server host Exodus Communications, of Santa Clara, Calif., announced in July the company was working on a 160,000-sq. ft. Internet data centre in Toronto.

And Vancouver’s 360networks is currently spending $100 million to transform an old Inglis Manufacturing plant in Toronto’s west end into one of the company’s primary switching centres and co-location facilities. Company spokesperson Michelle Gagne also said the company will be opening a facility in Calgary. Together, the two buildings comprise 450,000 sq. ft.

As well, AT&T Canada recently set to work expanding one of its two data centres in Toronto and is also preparing a brand new facility in Vancouver.

“Toronto’s expected growth rate is pretty high,” analyst Jordan Worth of IDC Canada Ltd. in Toronto, said of the telco real estate boom. “Being the business centre of Canada means more businesses, and more business period, [will] be going to Toronto than anywhere else in Canada. You combine that with some of the lowest telco prices in the world, and Toronto becomes a very attractive place to do business.”

Despite this, Worth said he does not expect most competitive Internet and telecommunications access providers to be satisfied with just one data centre in Toronto. Markley-Stearns has hinted that it is already looking at other major urban markets in Canada to set up another co-location facility.

“There’s a certain amount of need in every city,” said Worth. “And competitors are going to want to set up their co-location (facilities) wherever they’re operating. You want to be as close to your customers as possible.”