Cloud Capital, a global data center investment management firm, has launched a new core data center joint venture strategy with Realty Income, an S&P 500 company, creating a programmatic investment vehicle initially seeded with three investments valued at more than US$ 6 billion.
The strategy, called Cloud Capital’s Core Joint Venture Strategy (Core JV), will focus on stabilized hyperscale data centers in the United States that are leased to investment-grade tenants under long-term triple-net leases. The partners also plan to expand the strategy into Europe.
According to a press release, the Core JV strategy will use its integrated investment platform to acquire core data center assets in established markets with high barriers to entry. The firm will continue to source investments through its tenant relationships, proprietary pipeline, and sector expertise. The new strategy expands Cloud Capital’s existing investment platform, which also includes core-plus open-end, opportunistic closed-end, and value-add closed-end strategies focused on data center investments.
Hossein Fateh, Founder and CEO, Cloud Capital, said, “Drawing on more than 30 years of investing in and leasing some of the world’s largest data centers through multiple cycles, we believe this positions our partners to benefit from exposure to highly strategic data centers underpinned by accelerating demand for cloud and AI applications.”
Shariar Mohajer, President and CIO, Cloud Capital, said, “As the digital infrastructure market continues to mature, specialized sector expertise and proprietary sourcing are increasingly critical. Our dedicated platform, longstanding industry relationships and vertically integrated capabilities enable us to access differentiated investment opportunities and build portfolios with resilient cash flow, attractive long-term fundamentals, and long-term value creation for our partners.”
Sumit Roy, President and CEO, Realty Income, said, “Our programmatic relationship with Cloud Capital, which is vertically integrated with CloudHQ, a best-in-class developer and operator. The combination of high-quality data center assets leased to investment-grade tenants, long-duration triple-net leases, and an attractive return profile reflects our disciplined approach to capital allocation and value creation.”
Goldman Sachs & Co. LLC advised Cloud Capital financially, with Jones Day serving as legal counsel. Realty Income was advised by Moelis & Company LLC as financial advisor and Latham & Watkins LLP as legal counsel.