Global data center REIT, CyrusOne announced that it has entered into a definitive agreement with DataBank Holdings for the sale of its four data centers located in Houston. With the agreement, DataBank will acquire CyrusOne’s Houston West I, II, and III and Houston Galleria data centers. CyrusOne will lease back from DataBank the Houston West III shell to support a lease signed with a hyper-scale customer in the fourth quarter of 2021.
The duo announced that the 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 divestiture is expected to close by the end of the first quarter of 2022, subject to customary closing conditions. During the transaction, DH Capital, LLC and DLA Piper LLP served as CyrusOne’s exclusive financial and legal advisors.
The third quarter of 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%. David Ferdman, Interim President & Chief Executive Officer of CyrusOne said,
« We are excited to execute on our capital recycling initiative to fund our continued growth. This divestiture further optimizes our portfolio as we redeploy capital into accretive developments across core markets with diverse hyper-scale and enterprise demand in the U.S. and Europe. We are pleased to partner with the DataBank team on this important transaction for our respective companies. »