Industry Spotlight: James Fitzgerald on 165 Halsey Street

In the New York/New Jersey metro area there are a few iconic facilities that everyone in the industry knows.  One of those is Newark’s 165 Halsey, which has long been a key node in the region’s internet infrastructure, and which celebrated its 25th birthday in the telecom and infrastructure world this past spring.  With us today to talk about 165 Halsey and where it fits in the ecosystem is James Fitzgerald, EVP of Tishman Real Estate Services, which is the real estate investment and development firm that manages the facility.

TR: How did you get involved at 165 Halsey?

JF: I run the services group at Tishman, which is how and why we’re involved in Halsey Street and have been since day one.  We work for Market Halsey Urban Renewal, which owns 165 Halsey Street, and I am the third-party leasing and licensing manager. We also play a significant role in the master planning of the facility.  As this industry changes and specific colo and telecom needs evolve, we are always and constantly trying to be aware of and get ahead of that. Through a very tenured and experienced team of architects, engineers, construction managers, and expediters, we collectively try to master plan and roadmap where this facility goes over any given period of time, whether that’s 6-12 months from now all the way up to 25+ years.

TR: 165 Halsey just hit its 25^th birthday.  What are the origins of the facility?

JF: When the ownership group bought the building, it was a completely vacant old Bamberger’s/Macy’s department store in downtown Newark that was, back in the 1920s, the largest department store in the country.  They had no specific intent to develop it into a telecom carrier hotel or colocation facility at all. My predecessor and mentor, Joe Simone, was representing MFS Telecom at the time, and they were trying to locate a switch facility in the metro area. In researching fiber maps and power grids, etc., we located and identified 165 Halsey as an optimal choice.  Think about how a department store is built. They’re massive, with lots of vertical transportation which we have since removed for vertical riser capacity.  That was the beginning of Tishman’s involvement, and we have been working with the ownership group since that time. We have some headroom to grow and we have oodles of power available to us via PSE&G, and so we think the sky’s the limit really. Being here since Day 1 and witnessing the remarkable changes, while adapting to meet clients’ needs has been a huge benefit.

TR: What does the facility look like today?  What kind of tenants do you have?

JF: It’s a massive building, with 14 floors.  But at any given point in time, outside of the building staff, there might be 25 people in the building.  Other than some ground floor retail, it is 100% dedicated to colocation and telecom services. 

In terms of tenants, we have a variety. We have your traditional carriers and colocation providers that take individual floors. But what the building has really become is a colocation provider. We have single cabinet tenants anywhere from 3KW all the way up to multiple megawatts for some of the biggest internet providers, financial services, banks, cloud providers, etc. The 250-750KW user in that slightly more dense footprint is what we’ve seen the most demand from since last year and into this year.

TR: How much of that ‘headroom’ you mentioned is still available?

JF: Of the 1.2 million square feet of space we have, there is maybe 300,000 or so square feet of vacant space. That’s raw space which could be developed to expand our colocation business and we have master plans ready for when the time comes.

TR: In what ways has 165 Halsey evolved over the last few years?

JF: In the last 12 months, we just brought on two new compartments of tier-3 colocation space as well as 2N UPS power on our sixth floor.  That is about 40,000 square feet, and it is already very quickly filling up because of the demand. We are currently close to 450,000 square feet of building owned and operated co-location.

TR: We have seen AI driving changes across the industry, how has that manifested for 165 Halsey so far?

JF: In anticipation of AI, we have gone to great lengths with our team to get ahead of what would be required. We know that AI will demand significant cooling capacity because while the racks and the equipment gets smaller, they’re still drawing a lot of power. If traditional colo was designed to cool 6-8 KW per rack, now you’re regularly seeing 12, 15, 16, 20, etc., which becomes a problem. Our team has already come up with, facilitated and successfully deployed solutions for these AI situations.

TR: Are you adding more overall cooling and/or power infrastructure as well?

JF: From a building standpoint, our last big infrastructure project included a 15MW N+1 generator plant and a 4,000-ton evaporating/cooling, centrifugal chiller plant.  That becomes available to everybody in the building. We have taps on every other floor so we can get chilled water to anybody and everybody that needs it. In terms of future planning, not all 15MW generators and the engines that run them are. We built the centralized plants for both, and we have three megawatt generators, engines dropped in place with the capacity to add more. There’s an abundance of power. We have eight distinct bus rooms in the basement and the vaults in the street, three of which haven’t even been brought online. We are in regular contact with PSE&G, the regular utility, so that when that’s needed, they will bring in the power to the building and we will bring it upstairs.

TR: You did mention ‘oodles of power’ from PSE&G. As you know, power limits growth in some markets, what makes it easier in Newark?

JF: Outside of the New Jersey hospital systems, 165 Halsey is the most critical power user in northern New Jersey. In fact, when we had a structured shutdown during Hurricane Sandy, we were brought on immediately after the hospitals. We obviously never lost power because of generators and all of the redundancies we have in place, but I think it goes to show that our relationship with PSE&G and to the acknowledgement of the importance and sophistication of this facility when it comes to not just Newark but to the New York, New Jersey metro area.  New York City is a world away and 13 miles as the crow flies.

TR: So where are you investing your resources this year?

JF: We spend hours every week on a five-year master plan that changes every five minutes. We commit a lot of our time trying to anticipate future needs. There’s something always going on in the building.  As some of larger customers shrink, whether they become colo customers of ours or just leave, we take that space back and we develop it into tier-3 colo that we own and operate. We’re undergoing a massive electrical upgrade on our fourth floor in which we’ll put in 1.5MW as well as cooling upgrades. And then at any given time, we have significant tenant builds.  We offer anywhere from a single cabinet to build-to-suit dedicated compartments. Not only will we land power and cooling at the exterior wall of a compartment or a cage, we will offer additional help fit them out to customer specifications. We’ve had some of the biggest names in the world take us up on that, and we’re doing a handful of those right now. We just signed a 750 KW tenant in financial services literally last week.

TR: Do the owners of 165 Halsey have interest in expanding into additional buildings of this type?

JF: This is ownership’s only telecom building, and they have spent many years creating the team. I think there would be an appetite to grow, but there’s still some runway and work to be done inside this facility specifically. It’s a very smart group, and I think anything’s possible.

TR: What challenges do you see ahead for facilities like 165 Halsey?

JF: As an established operator, our challenges involve choosing how far ahead of the market demand we want to be.  It wouldn’t really be smart to build 80 megawatts of power at whatever cost, that is to wait 30 years for it to be leased up, but we’ll never get caught flat-footed when somebody comes to us and they need it. We generally try to stay about two megawatts ahead of the market, and when we go considerably below that is when we get the mines going and we start building new space.

The unique nature of changes in both equipment and usage when it comes to higher densities is also something that people are going to have to contend with. The challenge is to adapt and to be nimble enough to provide the customer with whatever their changing needs are. We really pride ourselves on being able to work with companies, especially larger ones, to create exactly what it is they want.

TR: Thank you for talking with Telecom Ramblings!

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Categories: Datacenter · Industry Spotlight · Interconnection