Data Centers Crucial To Lehman Sale

miller60 writes "What assets retain value in the midst of a financial panic? Data centers. When assets of bankrupt Lehman Brothers were sold to Barclays Tuesday for $1.75 billion, Lehman's data centers and headquarters accounted for $1.5 billion of the value in the deal. That echoes the JPMorgan-Bear Stearns fire sale, in which Bear's two data centers and HQ represented much of the sale price. Amidst financial turmoil, Wall Street's high-tech data centers become the crown jewels for buyers of distressed assets."

Comments

Re:It's all about the data

[mccalli]

No. it's all about avoiding the expense of building one yourself. The actual data in those centers may or may not be worthwhile to the buying organisation, but the floor space and ready-to-roll IT structure most certainly is.

Posted anon since I was involved in one of these things recently.

Re:Asset valuation programmer seeks job

[Venik]

The problem really started with you. And here's how. You elected the government, which adopted legislation, which enabled the lenders to give loans to unreliable borrowers, who would buy hugely overpriced houses they could not afford, that would go down in value because they were never worth their price in the first place, sending real estate business down the drain, closely followed by construction, mortgage, and insurance industries, that form the core of the country's financial system, which is controlled and guaranteed by the government, which borrowed trillions from EU, Japan, China and Russia to fight wars abroad for no particular reason, which dropped the value of the dollar, which caused energy prices to skyrocket, which accelerated our country's economic recession, which made it necessary for the government to spend more of your money to prop up this whole pyramid scheme we call the "free market". And how did all of this start? With too many of us voting for the idiot who couldn't spell "economy", let alone understand it.

Re:Suprising?

[AKAImBatman]

Sure, a sky scraper isn't going to lose all it's value, but it could be worth less than you paid for it

I somewhat doubt Lehman is making a profit on their data centers, either. What they are doing is liquidating the assets that have value.

The landlord, thinking ahead carried insurance to protect against the eventuality that one of their major tenants would vacate. Their insurance company: AIG.

As amusing as it is, that's exactly why AIG is in trouble. Each tier saw the risk coming and tried to pass the risk upstream. The problem is that the risk was not isolated. With all these upstream pushes, the risk ended up concentrated in the largest companies in the market. It's no coincidence that AIG is one of the largest insurance underwriters in the world.

Re:Suprising?

[AKAImBatman]

Uhh... is the technology sector doing well?

Indeed. It's one of the few sectors where rapidly rising oil costs and plummeting property values has little effect. As a result, the sector is one of the strongest in the market today. And not just because people must have the latest and greatest software and gadgetry. (Consumers actually have less money for that.) Instead, technology is seen as a possible solution to the problems plaguing other industries.

Real world example: UPS developed software to route their trucks through fewer left turns. This rerouting reduces fuel costs and thus produces tremendous savings for the company.

Re:All the banks are valueless.

[Crazyswedishguy]

For people who are still struggling to understand what's going on with the whole financial crisis, here's a great primer I was directed to: Subprime Primer.
It's a very simplified explanation of what's happened. From what I understand, it all comes down to everyone believing that real-estate value wouldn't stop rising.