Richard Magnuson, a pioneer in data center real estate, will step down as chairman of Digital Realty when his current term ends in April, the company said Thursday. Magnuson has decided not to stand for re-election to the post, citing "his extensive other business interests and time commitments." Magnuson also serves as managing director of GI Partners, the private equity firm that has been a key investor in Digital Realty and several other leading data center providers.
In April, current director Dennis Singleton will take over as interim chairman until the Digital Realty board appoints a permanent successor.
"Our Board of Directors expressed their gratitude to Mr. Magnuson for all his contributions to the company," the company said in an SEC filing. "Mr. Magnuson indicated that this difficult decision was made easier by his strong belief in the company and its management team."
Magnuson's focus on the data center sector began in 2001 when he founded GI Partners. At the time, the data center industry was entering a prolonged slump amid an oversupply of space, leaving data centers sitting empty or being sold for pennies on the dollar. GI Partners stepped up to buy many of them in what proved to be a savvy move.
"Back then data center investing was an oxymoron," said Magnuson said in a 2010 keynote at an IMN real estate event. "That’s why we, as contrarians, did very well."
The first investment fund raised by GI Partners was used to acquire the data centers that formed the nucleus of Digital Realty Trust (DLR), which went public as the first real estate investment trust focused on the data center sector. That first fund also invested in Savvis, a managed hosting provider focused on the financial industry that became one of Digital Realty’s largest tenants. GI Partners subsequently made investments in The Planet, EV1 Servers, Telx, SoftLayer and ViaWest.