Office conversion plans dropped as former Verizon tower changes hands for $120M

Seattle-based Sabey Data Center Properties has purchased a controlling interest in the former Verizon Tower at 375 Pearl Street for $120 million, according to Crain’s.

The 32-story processing center, widely considered one of the city’s worst eyesores, had once been slated to undergo an office conversion under Taconic Investment Partners, which bought the property from Verizon for $173 million in 2007. Those conversion plans never materialized, as Taconic wound up defaulting on its mortgage payments, and M&T Bank took control of the mostly-empty building last year.

Sabey has no intention of reviving the offices idea, instead opting to transform the 29 floors it’s taking over into a data processing center that can handle 40 megawatts of power — enough for 40,000 homes — by 2012. (Verizon still owns and occupies three stories, and will continue to do so after the Sabey acquisition.) Currently, the building is equipped to deal with up to 18 megawatts.

Sabey, which does not yet have an East Coast data center, is hoping to capitalize on what it sees as a burgeoning market for high-capacity data processing from New York’s medical, financial and technology research industries.

The Wall Street Journal had previously reported that YoungWoo & Associates might be a joint venture partner for Sabey in a deal to buy the 700,000-square-foot property, but ultimately Sabey instead had financing from National Real Estate Advisors.

Darcy Stacom and Bill Shanahan of CB Richard Ellis represented the sellers, and Jeffrey Heller and Sean Brady of Cushman & Wakefield represented the buyers in the deal. [Crain’s]