Andrew Power may be Digital Realty’s new chief financial officer, but Digital certainly isn’t new to him. Power has been deeply involved with Digital’s finances throughout the San Francisco-based real estate investment trust’s existence, starting with its IPO in 2004.
He was on the team of lead underwriters that advised the data center giant a little over one decade ago and has since been involved in nearly every capital raise the company has done, Power said. In April, Digital’s leadership asked him to join the company to replace William Stein, its long-time CFO who recently became its chief executive.
Power met Stein in 2004, when Stein took the CFO seat as the company went public, and it was Stein who asked him late last year to join the successor contest. A long time investment-banking man, whose most recent roles were with Bank of America Merrill Lynch and, prior to that, Citigroup, Power said he “had no real drive to leave banking,” when Stein approached him.
But what he knew from working closely with Digital for all these years made the opportunity attractive. He would be joining a team he had a lot of familiarity with, led by a new CEO with a confident vision of the future.
Power coming on board is part of a new chapter in the REIT’s history. Following the departure of its founding CEO Mike Foust in March 2014, the company has assembled a new leadership team and charted a new course, diversifying its model by striking partnerships with cloud and connectivity service providers to deliver joint solutions, promoting more actively its retail colocation business, and pruning its massive real-estate portfolio to get rid of non-core properties.
Other leadership changes included creation of two entirely new C-level roles for the company: chief operating officer and chief information officer. The COO role was filled by Jarrett Appleby, a long-time COO for competitor CoreSite Realty; and Michael Henry, former CIO at Rovi, joined Digital as its new CIO.
One of the biggest aspects of Digital’s business that gave Power confidence about joining the company was its global scale. In addition to facilities across the U.S., it has data centers in Europe and Asia Pacific. Many data center customers scale their businesses globally, and “this is one of the few areas where [Digital] has tremendous competitive advantage,” he said.
Power indicated that more international expansion is in the works. “We’re just at the tip of the iceberg in terms of our global reach today,” he said, adding that Asia Pacific would be a particular focus. Earlier this month the company announced a $150 million Singapore data center, its second in the island country.
Having had a lot of experience with real-estate-oriented investment banking, the uniqueness of data centers as a real estate asset was also attractive. This is one of the few real estate businesses that can layer high-value services on top of their footprint and continuously grow value of the real estate assets, he explained.
With selling off non-core properties and taking on partners that can provide services to customers leasing space and buying power at Digital’s facilities, maximizing value of the existing portfolio certainly appears to be key to the company’s current strategic direction.
Now, with its new leadership team complete, Digital is ready to execute.