Digital Island leases 215,000 SF in Brooklyn telecom center.

In response to New York City's growing embrace of e-business, San Francisco-based Digital Island has leased 215,000 SF in Brooklyn's new Atlantic Telecom Center, a 750,000-sf telecom facility currently under development by Carlyle Realty and Chase Capital Partners. The transaction marks the largest commercial lease in Brooklyn in four years and the largest telecommunications lease ever for a borough that is quickly emerging as a significant telecommunications hub.

Digital Island's new state-of-the-art facility, scheduled to open April 2001, will enable the company to meet the growing requirement for its integrated Global e-Business Delivery Network.

Digital Island's commitment to the Atlantic Telecom Center is great news for the borough of Brooklyn," said Mayor Rudolph W. Giuliani. "This announcement underscores our successful efforts in expanding Silicon Alley's boundaries and the importance of Downtown Brooklyn as a critical venue for the continued growth and success of the city's high-tech and new media industries."

"The financial services sector, which is synonymous with New York City, has embraced e-business and represents a major market opportunity for Digital Island," said Ruann F. Ernst, chairman and CEO of Digital Island. "The Atlantic Telecom Center perfectly fits our needs to continue to provide our managed Internet infrastructure to the leading financial institutions with world-class reliability, speed and security."

"We are excited to have Digital Island as our first major customer at Atlantic Telecom Center," said Tom Ray, Vice President of Carlyle Realty. "Our ability to be flexible with tenants stems greatly from the cooperation and assistance we have received from the City of New York and the New York City Economic Development Corporation."

Located in the heart of the Atlantic Terminal-section of Brooklyn, the new Atlantic Telecom Center is eligible for the New York City Industrial and Commercial Incentive Program, which provides for partial exemption from real estate taxes. As an added benefit, the Atlantic Telecom Center is located near four of the City's newly designated Digital NYC: Wired to the World high-technology districts.

EDC President Michael G. Carey said, "Digital Island is a welcomed addition to New York City's burgeoning telecommunications industry. Today, New York City has almost 4,000 high-tech firms, employing over 140,000 people, and I want to congratulate Carlyle Realty and Chase Capital Partners for their investment in Brooklyn and their dedication to the future of New York City's high-technology industry."

Atlantic Telecom Center, just 10 minutes from Manhattan, is the largest development in Brooklyn and the largest building renovation project in New York City. Carlyle Realty and Chase Capital Partners, which took control of the 1928, 10-story building located on a three-acre city block, is spending $70 million to transform the former tire factory into an advanced, 100%-dedicated, carrier-neutral facility for Internet service providers, web-hosting companies, local- and long-distance data communications providers, application services providers, data centers and other bandwidth-intensive users. Carlyle has master-planned the facility specifically for telecommunications use with 200-350 lbs. per sf floor loads, 100 watts per sf of electricity, all new mechanical and electrical infrastructures and 32 back-up generators. Freight elevators and stairwells have been removed and replaced with floor area to allow for 430-foot straight runs on 90,000-sf floors for data racks and ample central risers for conduits and pi ping. Building amenities include a new, high-security attended lobby with 24-hour access and video surveillance, and a new on-site, 115-car parking lot. The project is now available for tenant fit-out and will open in March 2001.

"Carlyle and Chase have used their extensive experience with the needs of telecom tenants to deliver a superior product that immediately serves the pent-up demand in New York," said Gary Kamenetsky, Director of Insignia/ESG, which represents the landlord. "We worked closely with Digital Island and its representatives to finalize the lease quickly, and we were pleased with the focus of all parties involved. We have other leases out and tenant interest for a good portion of the building."

"As a lead investor in technology companies including Digital Island, we are acutely aware of the growing demand for these state-of-the-art facilities," said David Gilbert, General Partner, Real Estate Group, Chase Capital Partners. "We are pleased that we had an opportunity to satisfy their needs through our venture with Carlyle."

Digital Island was represented by Aaron Wangenheim, Joseph Harkins and Peter Olans of Staubach.