"The key here is speed to market," says Alex Twining, president and COO, MetroNexus, North America. The quick growth of high-tech industries has created a demand that often exceeds the amount of space and electricity available. Fortunately, many older buildings, which may have sat empty for years, can be converted into carrier
hotels in as little as three months' time, depending on their condition and amenities.

"PRIME LOCATION"
When the first carrier hotels were developed in the late 1980s, high-tech companies chose to keep the location of their equipment a secret to elude the competition and avoid possible attacks from vandals or terrorists. But today, high-tech companies prefer to join forces and house their equipment in the same location.

"A lot of these carriers interconnect with each other," says Joseph Suppers, president of Node Com Inc., a Princeton, New Jersey, firm that helps companies find space in carrier hotels. "They're trying to create a critical mass by being in one facility." Indeed, marketing materials for carrier hotels often list their tenants as well as nearby high- tech companies.

While part real estate and part high-tech venture, one of a carrier hotel's selling points is its location. In Albany, for example, 11 North Pearl Street sits near a large intersection of fiber-optic cables that connect New York, Montreal, Boston, and Buffalo. "Albany sits in the middle," Pastreich says. "That's what Albany's claim to fame was originally."

But a building doesn't have to be near a major intersection to become a valuable carrier hotel. The demand is growing in nearly every city, especially larger ones. "It's gotten to be a hot product," says Dean Macfarlan, CEO of Dallas' Macfarlan Real Estate Services, who is in the process of converting a former supermarket chain warehouse just west