Sale-leasebacks continue top be a popular option for data center real estate investment trusts (REITs). Today Carter Validus Mission Critical REIT announced that it has conducted its second sale-leaseback transaction of an AT&T data center, paying $110 million for an AT&T facility in the Nashville suburb of Brentwood, Tenn.
The 103,000 square foot property serves as AT&T’s main communications hub for Tennessee and Kentucky, and features 75,000 square feet of mechanical space, with the remainder utilized for engineering and support functions.
“This acquisition continues to reinforce our commitment to purchase high quality, mission critical real estate leased to creditworthy tenants in strategic markets throughout the United States,” said Michael Seton, President and Chief Investment Officer, Carter/Validus Advisors, LLC.
Last month Carter Validus conducted a sale-leaseback deal with AT&T for a Wisconsin data center.
A sale-leaseback option typically involves a property owner selling their building to a second party, while agreeing to continue to lease space in the building. The transaction generates cash for the former owner (now the tenant), and provides the new owner steady rent from the lease. These deals are particularly attractive when the initial owner is a blue-chip company with a strong credit rating.
Carter Validus Mission Critical REIT is focused on two sectors, data center and healthcare, citing societal trends that it believes will boost demand for data storage and outpatient healthcare.