CyrusOne Sells Four Houston Data Centers for $670M

Global data center REIT CyrusOne Inc. recently entered into a definitive agreement with DataBank Holdings Ltd. for the sale of its four Houston data center assets. The divestiture is expected to close by the end of first quarter 2022, subject to customary closing conditions.

Under the terms of the agreement, DataBank will acquire the Houston West I, II and III, and Houston Galleria data centers from CyrusOne. Additionally, CyrusOne will lease back from DataBank the Houston West III shell to support a lease signed with a hyperscale customer in fourth quarter 2021.

Total consideration for the transaction will be approximately $670 million, subject to a net working capital adjustment, with proceeds from the sale used to fund future development projects. The third quarter 2021 annualized run-rate cash NOI represented by these properties, including the future first year lease payments that will be made by CyrusOne, aggregate $34.8 million, implying a transaction cap rate of 5.19 percent.

“This divestiture further optimizes our portfolio as we redeploy capital into accretive developments across core markets with diverse hyperscale and enterprise demand in the U.S. and Europe,” said David Ferdman, interim president and chief executive officer. DH Capital LLC and DLA Piper LLP served as CyrusOne’s exclusive financial and legal advisers, respectively, on the transaction.