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: