Who Owns Data Centers
Ownership of data centers has split between public real estate investment trusts, which must pay out most of their income and so live or die by their cost of capital, and private infrastructure capital, which can wait longer and borrow more heavily against signed leases. The take-privates of QTS by Blackstone and CyrusOne by KKR and Global Infrastructure Partners showed private buyers paying more than public markets would. The Aligned Data Centers acquisition showed a newer pattern: the users of capacity joining the owners. Faraday's read is that the buyer list is now a signal in its own right, and it says that capacity has become strategic.
Knowledge check
Why can a private infrastructure fund sometimes pay more for a data center platform than public shareholders value it at?
Show the answer
A private fund can tolerate years of development spending with little current income, can finance individual assets with debt tailored to their contracted cash flows, and pays for the time saved by acquiring land, power and leases already assembled. Public real estate investment trust shareholders, focused on dividends and adjusted funds from operations per share, often value those same features less.