CVMC REIT Sells 2 Data Centers for $85M

By Barbra Murray

Alpharetta Data Center II

Carter Validus Mission Critical REIT has pocketed $85 million on the disposition of two data centers. In transactions with separate buyers, the company sold the Milwaukee Data Center and Alpharetta Data Center II, totaling 224,500 square feet in the suburbs of Milwaukee and Atlanta, respectively.

The REIT sold Milwaukee Data Center, a 59,500-square-foot property sited on eight acres in Hartland, Wis., to Landmark Infrastructure Operating Co. LLC for $21 million. The seller had owned the purpose-built, mission-critical data center since picking it up for $19.5 million in 2014.

Alpharetta Data Center II in Alpharetta, Ga., fetched $64 million in its sale to Alpharetta DC LLC. Occupying 14.4 acres, the 165,000-square-foot facility encompasses 50,400 square feet of powered-shell enterprise data center space, 54,800 square feet of office and administration accommodations and 59,800 square feet of supporting infrastructure space. CVMC REIT had purchased the Alpharetta asset later in 2014 for $56.7 million.

Sticking to strategy

The Milwaukee and Alpharetta transactions follow a couple of major data center dispositions CVMC REIT completed in 2017, in line with its current investment strategy, which involves leaving the major acquisition activity to CVMC REIT II. The pursuit of liquidity for the remainder of its data center assets is on CVMC REIT’s list of goals for 2018, as noted in the company’s 2017 annual report.

“Our board of directors is actively evaluating how to best deploy the proceeds from these transactions, after any required paydown of the company’s debt obligations, including, but not limited to, further reducing the leverage of the company and possibly paying a special distribution to our stockholders,” Michael Seton, president & CEO of Carter Validus, said in a prepared statement on the two recent sales. 

With the completion of the Milwaukee and Alpharetta sales, the company has just one remaining data center in its portfolio—for now. The Andover Data Center, located outside of Boston in Andover, Mass., is currently under contract.

Toward the close of last year, CVMC REIT parted with the 251,100-square-foot Chicago Data Center, selling the asset to an affiliate of Digital Realty Trust for $315 million. The company also sold a 14-property portfolio to an affiliate of Mapletree Investments Pte. Ltd. and Mapletree Industrial Trust in a $750 million transaction.

Carter Validus Mission Critical REIT