Realty Income, Cloud Capital Launch JV to Own Hyperscale Assets

Realty Income Corporation and Cloud Capital said Wednesday they have formed a joint venture with a global institutional investor to invest in a diversified portfolio of stabilized hyperscale assets. The JV has committed to acquire three data center assets, with the seed portfolio valued at more than $6 billion.

“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,” said Sumit Roy, president and CEO of Realty Income.

At Cloud Capital, founder and CEO Hossein Fateh said, “Drawing on more than 30 years of investing in and leasing some of the world’s largest data centers through multiple cycles, I have seen firsthand the importance of acquiring and developing high-quality assets and long-term tenant relationships. We believe this positions our partners to benefit from exposure to highly strategic data centers underpinned by accelerating demand for cloud and AI applications.”

As part of the transaction, Realty Income will acquire an initial 45% interest in the first portfolio asset, a stabilized hyperscale data center asset located in Northern Virginia’s “data center alley” and fully leased to an investment-grade hyperscale tenant under a long-term triple-net lease.