Cloud Capital and Realty Income Jointly Establish Data Center Platform

en.Wedoany.com Reported - Cloud Capital and Realty Income announced a joint venture to establish a data center investment platform, with initial assets including three facilities located in Virginia.

The two companies, together with an undisclosed global institutional investor, are co-investing in a stable portfolio of hyperscale assets. The facilities in this portfolio are leased to investment-grade tenants under long-term triple net leases.

The core joint venture strategy has committed to acquiring three data center assets in Northern Virginia, leased to investment-grade hyperscale tenants on a triple net (NNN) basis for terms of 15-20 years. Specific details of the facilities have not been disclosed.

Realty Income expects to invest up to $1.4 billion in the joint venture, with an initial investment of approximately $700 million planned to be funded between the second and third quarters of 2026. Realty Income will first acquire a 45% interest in the first stabilized operational data center and similar stakes in the other two data centers currently under development.

Cloud Capital will hold a minority equity investment in the asset portfolio. Cloud Capital's sister company, CloudHQ, will provide property management and development management services for the portfolio. Going forward, the joint venture will focus on investing in facilities in the United States and Europe.

Founded in 1969, Realty Income is a real estate capital provider with a portfolio of over 15,500 properties in the U.S. and Europe. The company previously co-invested in data centers in Virginia through a joint venture with Digital Realty.

Founded in 2020, Cloud Capital is the investment management affiliate of data center operator CloudHQ, describing itself as a specialized investment management firm focused on acquiring, managing, and operating high-quality data centers. According to the latest announcement, it manages data center assets valued at over $12 billion, with 30 assets, contracted IT load exceeding 330 megawatts, and total area exceeding 4.2 million square feet.

Sumit Roy, President and CEO of Realty Income, stated: "Today's announcement is a testament to the strength of our business model and its ability to translate across industries, including digital infrastructure. We are excited to advance a scaled digital infrastructure platform while deepening our programmatic partnership with Cloud Capital, which is vertically integrated with CloudHQ, a premier developer and operator. The combination of high-quality data center assets leased to investment-grade tenants, long-term triple net leases, and attractive returns reflects our discipline in capital allocation and value creation."

Hossein Fateh, Founder and CEO of Cloud Capital and CloudHQ, added: "Hyperscale customers require infrastructure to be delivered at unprecedented scale and speed. Partnering with Realty Income and global investors combines capital and operational expertise to meet this demand and expand our leadership in the sector."

Moelis & Company LLC served as financial advisor to Realty Income, and Latham & Watkins LLP served as legal counsel. Goldman Sachs & Co. LLC served as financial advisor to Cloud Capital, and Jones Day served as legal counsel.