CyrusOne’s board has appointed a permanent replacement for former CEO Gary Wojtaszek, who resigned in January.
The new CEO, Bruce Duncan, has plenty of experience steering large publicly traded real estate companies but no apparent experience in the data center business. CyrusOne announced the appointment Monday.
One analyst who closely tracks the company said the board’s choice of an outsider was surprising and a “modest negative,” according to Dallas Business Journal, which cited a research note by the analyst, Colby Synesael with Cowen.
Recognizing that Duncan was “highly regarded within the REIT community,” Synesael said the executive “has no data center experience to our knowledge.”
The analyst also pointed out Duncan’s successful sale of Starwood Hotels & Resorts Worldwide and his reputation as a “deal guy.” Rumors of Dallas-based CyrusOne management weighing a sale have been reported several times. Publicly, however, the company has denied that it’s been weighing a takeover.
Duncan’s appointment “may ultimately result in a sale of CyrusOne,” Synesael said but cautioned that it was “tough to say with confidence this will be the case.”
The board said in the past that Tesh Durvasula, a long-time CyrusOne executive who was appointed as interim CEO after Wojtaszek’s departure, was being weighed as one of the candidates for the permanent role.
Durvasula, who was planning to leave the company before being tapped as a temporary CEO, will now leave, after ensuring a “smooth leadership transition.”
Despite COVID-19 headwinds, CyrusOne and other large data center REITs reported a strong first quarter and sounded cautiously optimistic that they would ultimately benefit from businesses’ rapid shift to digital necessitated by the pandemic and the lockdown orders issued in the attempt to slow the spread of the coronavirus.
CyrusOne reported $245.9 million in revenue for the quarter – up 9 percent from the same period last year.