Data Center Investment in the US This Year Already Beats All Records
It’s only the end of September, but the year has already seen more capital invested in data center assets in the US than any previous year.
Sep 29, 2017
Total value of entire data center companies, asset portfolios, and individual facilities that changed hands this year so far was $18.2 billion, according to a tally by the commercial real estate firm CBRE. That’s more than double the amount of investment in 2016; it also puts 2017 on track to “eclipse” all data center investment in the last three years combined, CBRE Research said in a recent market report:
Over the past five years, more than $45 billion of investment capital has flowed into the data center sector, with more than 50% of the total occurring since Q4 2015
This year owes its outsize level of data center investment largely to three mega-deals: Equinix’s $3.6 billion acquisition of a 24-data center portfolio from Verizon, the $2.8 billion acquisition of CenturyLink’s data center portfolio by BC Partners and Medina Capital (to form Cyxtera Technologies), and the $7.6 billion acquisition of DuPont Fabros Technology by Digital Realty Trust.
Those were three of 21 M&A deals in the sector that closed this year. There were two other billion-plus-dollar deals on
the list: the $1.68 billion acquisition of ViaWest by Peak 10 and the $1.2 billion acquisition of Vantage Data Centers by a Digital Bridge-led consortium.
Many of the deals on the list are acquisitions of individual properties, such as GI Partners’ $276 million acquisition of KOMO Plaza in Seattle and CentralColo’s $96 million acquisition of Tysons Technology Center in Northern Virginia.
Looking at the list, it’s hard not to notice one particularly active buyer: Carter Validus, a non-publicly traded REIT that primarily buys fully occupied data centers and medical facilities; in many cases they are sale-leaseback transactions, where the occupant sells the facility but stays there as the buyer’s tenant. Carter Validus has bought five data center assets so far this year, spending close to $300 million.
Here’s how US data center investment levels have trended since early 2011, according to CBRE: