Robust 2016 Data Center Real Estate Acquisitions Activity

June 21, 2016 Five 9s Digital

Transaction volume for 2016 is stacking up to be quite an active year for the data center real estate sector.

Some notable 2016 data center acquisitions include:

• The CME Group $130M sale and partial leaseback of its 428,000 square foot suburban Chicago data center to CyrusOne.
• The Dupont Fabros $125M sale of its 360,000 square foot data center to QTS Realty Trust in Piscataway, New Jersey.
• GI Partners $34.7M acquisition of a data center occupied by Apple in Sunnyvale California.
• The Carter Validus acquisition of a $19.4M new fully leased data center in Nashville Tennessee and two other data center acquisitions totaling $24.2M in Alpharetta Georgia and Flint Michigan.
• The acquisition of the 733,000 square foot the Garland Center office and data center building in Downtown Los Angeles for $210M.
• Digital Realty Trust's acquisition of eight (8) data centers in Europe from Equinix for $874M including facilities in London, Amsterdam, and Frankfurt.

In the Five 9s Digital Full Year 2015 Data Center Acquisitions Report, 2015 acquisitions activity yielded a total of approximately $750M and approximately 4,394,407 square feet sold.

2016 has seen over $1.5B of data center real estate acquisitions activity so far with several transactions pending that will push transaction volume well over $2B.

We anticipate cap rates to remain fairly steady in the data center sector at the current levels with some compression for good credit, long term leases in strong markets.