American Tower Sells $2.5B Stake In Newly Bought Data Center Portfolio

Investment firm Stonepeak has agreed to buy a 29% ownership stake in American Tower’s U.S. data center portfolio, a deal that values the tower REIT’s data center assets at $10.5B.

The deal, expected to close in Q3, would have Stonepeak pay around $2.5B, with American Tower retaining managerial control and day-to-day oversight over its data center facilities, the companies announced Monday morning.

American Tower dramatically expanded its data center presence in November with the acquisition of REIT CoreSite for $10.1B. American Tower CEO Tom Bartlett is framing the Stonepeak deal as part of the equity financing for the CoreSite acquisition, and as part of a broader strategy to prepare for a future in which 5G makes the company’s vast cell tower assets key internet connection points. 

“[The deal] creates a platform through which growth opportunities can be strategically evaluated and financed, with American Tower and Stonepeak committed to executing on opportunities as the 5G ecosystem continues to develop,” Bartlett said in a press release.

New York-based Stonepeak, which specializes in real estate and infrastructure investments, is buying into a data center portfolio consisting of 27 data centers across 10 US markets. Twenty-five of those facilities were acquired as part of the CoreSite deal. 

Experts told Bisnow that American Tower’s purchase of CoreSite exemplified a key trend across the digital infrastructure space: As the emergence of so-called edge technologies makes assets like cell towers, data centers and fiber networks increasingly co-dependent, operators that previously dealt with only one piece of the digital infrastructure puzzle are moving to bring a range of these assets under one roof. 

Leadership of both American Tower and Stonepeak framed today’s deal as a bet on that strategy, pointing to the strong interconnectivity at American Tower’s data centers as an important complement to a tower portfolio that is increasingly a key element of the internet’s infrastructure. 

“American Tower has established one of the premier network dense, interconnection-focused data center platforms in the U.S. through CoreSite and previous acquisitions, which we view as a great fit for our core infrastructure strategy,” Stonepeak Managing Director and co-Head of Communications Andrew Thomas said in a release.

“The platform is strategically positioned to be at the forefront of the continued shift from a traditional centralized infrastructure model to a cloud-based, connected and distributed digital infrastructure model and we are excited to partner with the American Tower team to help accelerate investment behind this trend in the years to come," Thomas said.