An innocuous high rise in downtown Los Angeles, California, just sold for a record $437.5 million. That’s 2.5 times the price per square foot of comparable buildings in the area, which might seem surprising, given that there’s nothing special about the building itself. But there is something special about its tenants.
That’s because 624 S. Grand Ave—more commonly known as One Wilshire—is the biggest telecommunications hub on the US west coast, according to CBRE Group’s Kevin Shannon. In fact, the importance of this high-rise data center is only rivaled by two other data centers in the world, according to Shannon: 60 Hudson Street in New York City and Telehouse in London.
One Wilshire is home to telecoms like Verizon, Sirius XM Radio and China Telecom. It’s also home to colocation centers—data centers where different companies rent space to store servers—such as the one run by CoreSite. Not only that, it sits at one end of fiber optic cables that connect Asia and North America, with much of the low-latency traffic between the two continents coursing through its wires. It’s little surprise that stock brokerage Crowell, Weedon & Co. is also a tenant. Some companies that trade try to locate as close as possible to their servers to minimize the time required to transmit data.