Handing Back The Keys

When it came on the market in the spring of 2000, CyberFortress I served as the poster child for the Internet data center boom, sparking a bidding war among eager tenants. Now it's the latest example of how landlords are taking it on the chin.

On Monday Infocrossing Inc. officially terminated its lease for the 54,000 square foot data center facility in Loudon County, Virginia, which would have paid an additional $30 million to landlord Fortress Development (formerly DataCentersNow). Infocrossing said last August that it it no longer has any need for the space, and has been paying operating expenses of nearly $600,000 per quarter to maintain it.

CyberFortress I was built on spec. When it was completed in the spring of 2000, nearly 60 prospective tenants toured the site, and 11 bidders competed for the right to lease the project.

Infocrossing said it also recently renegotiated the lease for its Atlanta data center at 6620 Bay Circle Drive in Norcross. "Under the renegotiated lease, rent commitments are reduced by 33 percent - a cash savings of $5 million over the balance of the lease term," Infocrossing said in its release.

That was good news for Infocrossing's shareholders, as the company reported its first operating profit since 1999. But if Infocrossing's numbers look prettier, it's because its landlords got a haircut.