Telehouse and DataGryd Partner in New York Data Center Market

Telehouse, the data center provider owned by the Japanese telecom KDDI, has joined forces with DataGryd, a wholesale data center provider with four stories in one of Manhattan’s most connected buildings, at 60 Hudson St.

The companies said there was demand for customized data center space with access to a rich interconnection ecosystem, which is something the 24-story building can provide. DataGryd brought its New York data center online in 2014 after a big infrastructure upgrade, with Telx as the anchor tenant occupying one of the four floors under the wholesaler’s control.

Telx, which was recently acquired by DataGryd and Telehouse competitor Digital Realty Trust, operates one of New York's most important network meet-me rooms in a non-DataGryd data center at 60 Hudson.

Telehouse provides retail colocation services out of about 40 data centers in North America, Europe, Middle East, Africa, and Asia.

New York has traditionally been one of the biggest and most active data center markets. All major data center providers have presence there, and while it’s a highly competitive market, it remains one of the most expensive places in the world to operate a data center.

According to the latest market report by the commercial real estate firm Jones Lang LaSalle, data center rental rates in New York City range between $300 and $700 per kW.

A company can get data center capacity for about half that just across the Hudson, in New Jersey, where the rates range between $125 and $350 per kW. Northern Virginia, the closest major data center market, has rental rates from $120 to $180 per kW.

Still, because of a limited supply of “quality” data center space and continuing high demand, JLL expects New York data center rates to remain high.

DataGryd is one of three wholesale data center providers in New York City that have vacant data center space to lease. The other two are Seattle’s Sabey Data Centers and San Francisco-based Digital Realty.