Digital Realty forms JV with GI Partners for stabilized hyperscale data centers

Digital Realty announced it has partnered with GI Partners to establish a joint venture for the sale of a 65% interest in two stabilized hyperscale data center buildings and their associated equipment in the Chicago metro area. Digital Realty will receive approximately $743M of gross proceeds related to the joint venture and the associated financing, and will maintain a 35% interest in the joint venture while continuing to manage the day-to-day operations of the assets, providing a seamless customer experience. Digital Realty has also granted GI Partners an option to purchase an interest in the third facility on the same hyperscale data center campus. Digital Realty originally acquired the facilities in 2017 through its merger with DuPont Fabros. The two data centers contributed to the joint venture contain approximately 67 megawatts of IT capacity and are 90% occupied in aggregate, primarily by investment grade customers. Based on annualized in-place cash NOI at June 30, 2023 and the benefit of leases signed but not yet commenced, the transaction values the two facilities at approximately a 6.5% cap rate. Net proceeds will be used to pay down debt and for general corporate purposes.