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Monday, February 27, 2006, 07:00 am PT (10:00 am ET)

Apple buys data center originally built for MCI

Apple Computer has acquired an impressively-equipped but never used data center in Newark, Calif., the San Jose Business Journal reports.

The iPod maker is believed to have purchased the 107,000-square-foot facility for an estimated $45 million to $50 million — illustrating rapidly rebounding demand for — and the dwindling supply of — Silicon Valley area data centers, according to the report.

The facility, which spans across 39800 and 39840 Eureka Drive, was originally conceived for communications company MCI WorldCom before getting mothballed after its 2001 completion.

According to the report, the most elaborate "Tier IV" centers such as the Newark facility have the highest levels of redundancy and security, and can cost upwards of $1,200 per square foot.

However, Apple's is believed to have paid in the vicinity of only $450 per foot by acquiring the facility from Dallas, Texas-based Stream Realty Partners, which manages an opportunistic investment fund aimed at buying data centers at bargain prices.

Gregg von Thaden of Colliers International in San Jose, Calif., Apple's primary Silicon Valley real estate negotiator, reportedly represented Apple in the Newark purchase-and-sale negotiations. Mr. von Thaden's was also integral in Apple's recent acquisition of a 116,830-square-foot office complex at 10400-10450 Ridgeview Ct. in its home town of Cupertino, Calif .

The Cupertino facility includes about 56,315 square feet leased directly from property owner Grosvenor International and 60,515 subleased from IBM, according to the report.

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