 Welcome to JSA TV and JSA Podcast, the newsroom for telecom and data center professionals. I'm Jean-Marc Slim of JSA, and joining me today is Mario Caderon, VP of Real Estate of Server Farm. Mario, thank you so much for joining us at JSA. My pleasure. Nice to be with you. Good to have you. And now for our viewers who may not already know, and I'm sure many of them already do, can you tell us a little bit about what makes Server Farm unique as an organization? Sure, if you happen to. So Server Farm is a data center ownership and operating company. We specialize in the physical infrastructure associated with the data center. We control a global portfolio. And I think what really makes us unique is that we primarily focus on existing facilities for our new data center footprint. So we typically will acquire existing data center assets that are poorly utilized and create efficiency within those data centers, create additional capacity and then sell that to our customer base. And our company is structured from a skill set to allow us to accomplish that business objective. Mario, Server Farm recently announced its acquisition of a 117,500 square foot data center in the ever-evolving Los Angeles market. Can you tell us more about the latest addition to your global portfolio and what made this acquisition so appealing? Sure, happy to. So this acquisition was a strategic decision on the part of Server Farm to enter the LA market. We're actually headquartered about five blocks away from this facility. So we were very much aware of the facility, very knowledgeable on its capabilities. We're never quite sure in the past about the LA market just because of the cost of doing business in that market. But recently we've noticed a significant uptick in our customer interest in the LA market. And we believe that the timing is right now for the acquisition of capacity in that market. And for Server Farm, it's basically an edge play. So we've acquired a facility that is in the heart of one of the largest population centers in the United States. That facility has a scale that's just about the right size fit for Server Farm. Between that 115, 125,000 square feet, we can deploy sufficient capacity in that facility that we can accommodate the customers who are interested in us expanding in that marketplace. So, you know, the facility was pretty much prototype for Server Farm existing facility, some customer base in existing customer base in that facility, but utilization is not very high. So there's a significant amount of capacity that we can offer to customers that still is not utilized within that facility. So it's got a good location. Power is available within that facility so that we can scale up the capacity and it's got great network connectivity from that location. So we thought it was a very strategic addition to our portfolio. And again, we think the timing is right for the LA market. Well, the demand is certainly there. Yes, it is. And it's not heavily served either. I think just the prohibitive cost base over the years has limited the amount of supply available in the LA market. I don't know that it will ever be a massive data center market, but there is a very sophisticated and entrenched business community within the LA market. A lot of which is very, very dependent on digital infrastructure. So we think the timing is right and we think that there's not a sufficient supply of capacity within that market. We've acquired this asset and we will likely look to grow that capacity. If we look into your role as VP of real estate, when server farm looks to growth status in the portfolio, what are you looking for in the facility? You briefly touched on this, but what are the specifics of what you look for in the facility and what are the most important factors for your clients? Sure. Well, the most important thing would be the market that the facility is located in. It has to be a market that we feel we can compete effectively and can generate customer demand. Our customers want to be there. So that's one of the primary motivating factors for server farm in any of the markets that we pursue. And then there are a whole host of other factors associated with the property. We typically try where possible to buy existing assets that have some income stream attached to them. So we're not starting from ground zero. This particular asset in El Segundo did have an income in place whenever we acquired it. It was not heavily utilized. There's a lot of run rate left in that facility. So that's, and then that opens up some of the other considerations that we have. I mean, we as a company are looking to create value, to add value to these assets. And one of the ways that we do that is to open up this capacity to our customers. So there was a sufficient amount of unutilized capacity in this facility that it was attractive to us because we knew that it would be attractive to our customer base. And the way that server farm is structured in house, we have a full operations team operations capability. So we would bring our operations team to that facility. And if possible, generate more efficiency through our internal operating model. And then we also employ a development and construction engineering team. So our construction engineering team was able to go into that facility, look at the existing mechanical electrical infrastructure, the topology and determine that we could add sufficient capacity efficiently so that we could serve as a customer base. So we're looking at market, we're looking at and also the scale of the asset, the scale of that asset was appropriate for us. We typically are looking at for something on the small side 80,000 square feet, but really this 115, 120,000 square foot is pretty much a perfect bite size for us. We can put sufficient capacity in there that we could accommodate our customer base. So it's a future proof assets. It's an acquisition for the future as well, not just the now. That's correct. That's correct. I think Los Angeles will be is a is a is a coming market. You know, it's not one of the larger data center markets in the world today because it's it, the cost of doing business there has been high. There hasn't been a lot of data center development there. And that's one of the other reasons why we're interested in the market now. We think that all the edge that demand is, you know, the timing is right for a lot of the hyperscalers to move into this location. So even though this this data center has has some scale to it, it's really more or less an edge play on the on the part of server form where we know we're acquiring an asset that's deep into the heart of this massive population center with a significant amount of network capacity in this area. So we have we have adequate network capacity as well as as utility available to the data center. Those are those are some of the other important considerations and looking at and looking at an asset and whether or not it's it's going to work for server form. I think I got myself confused between LA and San Francisco is considering the whole corridor all the way up there. It's been a it's been a very different very different animal it's been quite active is one of the larger data center markets in the world. I think LA, you know, will always be somewhat more limited but there is a significant industrial base in the LA area, and we believe it's underserved. We're looking at obviously we're interested in the the facility that we just acquired but potentially looking at some additional capacity additions. Sounds very interesting. I mean I know your company organization quite a lot because I've had the opportunity to sit down with quite a few of your colleagues over the years. I know it's quite unique compared to some of the other providers out there. But if we look at a special segment of the market out there so the enterprise. What would you say to an enterprise who see their own data center as a burden to their balance sheets. Well we deal with that quite often. That is one of our primary targets for capacity additions you know new acquisitions, and there is quite a dynamic going on in in the global data center market today where years ago 1015 whatever years ago, many enterprise entities had no choice but to build their own data center. And they did build these data centers with the idea that their capacity and utilization will continue to increase as it had in the previous 10 years. Well, basically none of that happened. These companies built these fairly large data centers with growth capacity. In fact, most of the companies that we look at most of the enterprises have not grown their capacity and in fact have shrunk their capacity within these facilities. So they end up with large extremely expensive assets sitting on their balance sheet that are very very poorly utilized. So the cost to run manage and maintain upkeep the data centers. It's just prohibitively expensive. And we see that all the time around the world. So, and as I mentioned before server farm is sort of structured to a be perfectly positioned to acquire an asset like that from an enterprise entity, and then work with that enterprise entity to help them to right their footprint within that data center, allow them to maintain on prem capacity within the data center, but only pay for what they're actually utilizing. And then typically we would free up, we would free up the excess capacity to our customer base. So that's kind of a key ingredient to the server farm business model. And as I said before, we're structured from a talent base in order to accomplish exactly that, that business model. That's the combination of real estate, finance, a very experienced operations team, very experienced engineering and development team, and we combine all of that together into a coordinated unit to be able to acquire these assets but really, really to help the enterprise become more efficient in their utilization of the data center. Which goes in line with the wider trends in the industry of the as a service service adoption as well. And I think your concept of sending back the capacity that's not utilized back to the customer that's quite interesting and high spread capacity so that's, that's a different shape I'll say. Right. And in many cases, we would utilize or we would open this capacity and to to various hyperscalers and hyperscalers may want or have an interest in this excess capacity, because the customers that we typically deal with that we're buying these data center from data centers from our world class companies that the hyperscales would want to deal with anyway. You put them two side by side and it creates this, you know, this, this great combination of entities in the data center. Speaking of great combination, a great topic that can never go in touch with when we talk about acquisitions and building facilities nowadays. It's just an ability to climate change, saving planet Earth. How does this recent acquisition in Los Angeles aligns with your company's sustainability mission and goals. From a sustainability standpoint. Yes. Yeah. So, yeah, I think our entire business model is sort of built around a concept of sustainability. You know, we, we rather than build new data centers were designed to take existing legacy facilities and make them more efficient and far more usable. So, in essence, you know, we, we are rehabilitating modernizing existing facilities and it eliminates the need to build new stuff. So, so basically, virtually every one of our facilities, Chicago, New York, Washington, Atlanta, Toronto, all of those facilities we acquired as existing assets and modernized created in house efficiencies within the data centers and it eliminated the need to go out and acquire or build and utilize all the building materials associated with with with a new facility. So, and we think there is a very substantial market of existing facilities that are perfectly adaptable for this this modern take on on the enterprise data center. We go in create a co location arrangement for the for the enterprise. And then bring other customers in and it gates the need to build new data centers. To me, it's, it's sort of a perfect combination for a sustainability model. The enterprise wins the the third party customers who come in win because you know we were providing this capacity to them in a in an existing facility and server farm benefits also because it's certainly a part of our business model and a piece of our success. And I mean sustainability has become part of the evolution of the modern data center let's call it that way. There's other things changing and with enterprises experimenting with the public cloud and hybrid IT. What do you see as the role of the wholesale data center moving forward. Well, I think it has a very critical role in in the dynamics of the modern data center. So, as I mentioned before, you know enterprise all of our customers are certainly looking at some some level of cloud deployment. But as we've found out is that most of our customers have a component of their IT requirements that really don't belong in a cloud environment, they're perfectly suited for on premises capacity. And so what we've we've we've been working with our customers is that keeping the in house IT deployment in house that the piece that's necessary bring in other companies in many cases like I said hyperscalers who would be able to handle the customers cloud requirements and doing as much of that on premises as possible. So it's sort of putting the IP loads in the right place, keeping the on premises load on premises and allowing that customer then to deploy a cloud based deployment where necessary, either on our site or through other offsite cloud deployment. Then building on that and on everything else you've said throughout these chats as well, especially around the potential future expansions into other markets and current markets. What are you working you your team server farm, why are you working on for 2021 and even beyond but what's what's in the pipeline. Yeah, so we are a very active and expanding company. We continue to look for strategic acquisitions in locations that we think will be viable for for our customer base. So for example, right now, we just completed of course the acquisition of the facility in Los Angeles. We are looking at increasing our footprint in the Los Angeles market more to come on that soon Toronto. I guess in the last 18 months or so, we completely redeveloped our asset in the in the Toronto market. We got it it created a brand new mechanical electrical infrastructure created a significant collocation lease with with a significant international hyperscaler, and we are now actively engaged in discussions to increase the capacity there. Also, we have the ability to build another building on that site, and we're working on on getting all of the entitlement and all the other planning components in in in place so that we can build that other building because there is significant customer demand in that Toronto market. And I guess the last significant piece that that we've got is, again, customer interest customer demand and some somewhat of a an in house advantage where we're actively engaged in development in in Israel. So new market for us, something that's just sort of that market has begun to explode. Our parent company is Israeli based so we have a bit of a built in advantage there, and we're actively engaged in securing sites and building in Israel right now. So I think Israel checks a couple of boxes a it's a it's a very sophisticated free market economy, relatively stable governmental situation there, sort of an anchoring location in the EMEA market area. You know, very highly educated workforce, and with without a significant digital infrastructure deployment throughout the country there. So I think the country is looking to expand that grow that infrastructure, that digital infrastructure network, and they need they need it's it's it's it's very much under supply. It's a very difficult company or country to to work in just because it's, you know, language currency, etc, etc, difficult, you know, in terms of getting approvals for for new site development. We have a bit of an advantage there so I think it will be a very successful expansion for server farm. And again, there's a fair amount of customer demand to be in that location. And I think, you know, a number of our customers see that as a jump off sport part point for the greater Middle East and then the northern Africa region. It's definitely a very interesting market and a differentiator, the entire region. But Mario, you've got so much going on in US in Canada, here in EMEA. What can where can our listeners find out more information about you and your projects and where you're going next. Sure. Well, probably the best spot would be to to check out our website. You know, our website has a ton of information about our existing locations. You know, discussion about our operations model how we how we look at the data center world how we run things. We haven't even gotten into one big differentiator for server form, which is our proprietary in command data center management service platform that we employ throughout our portfolio and we employ on a third party basis for a number of major global enterprise entities. And that is a it's a system that sort of binds our entire portfolio, all of our operations together, and that makes us helps us to make us a much more efficient data center operator and helps our customers to become very efficient within our data centers. So yeah, so you can check out our website server farm LLC.com is a great source for for all that additional information. And then I believe we've got a podcast that's going to be coming up that will provide a great deal of additional information more to come on that. No, for sure. And well, my thank you so much for joining me. I thought it was very interesting and very good points made. I can't wait to see where you go next. I mean, you mentioned a few I can't wait to see expansion. I love a good data center expansion. Thank you. Thank you. And be sure to stay tuned for the launch of the server farms podcast like my referred the future of data centers. This will be a mini podcast series from the viewpoint of several farmers and data growers. I will be joined by the influences journalists and server farm experts to explore the industry's most pressing topics in this unique mini podcast series. For more information, visit server farm LLC.com slash podcasts. Thank you so much for tuning into JSA TV and JSA podcasts. Until next time, happy networking.