Phoenix, Ariz. – CBRE represented Lincoln Rackhouse, the data center division of Lincoln Property Co., in partnership with Principal Real Estate Investors, in the sale of a Phoenix-area data center to CBRE Global Investors for $72.75 million.
Kristina Metzger and James McCarthy of CBRE Data Center Capital Markets represented the seller in the transaction. Lincoln Rackhouse and Principal Real Estate Investors purchased the data center in 2018 as part of a three-property portfolio.
“This sale represents a very successful execution of our business plan with Lincoln Rackhouse, and continues a 10-plus year track record of achieving outsized returns for our clients through investment in the data center sector,” said Ben Wobschall, director of acquisitions and dispositions for Principal Real Estate Investors. “The competitive sale process was a testament to the continued evolution of data centers as an institutional asset class.”
Located at 2500 W. Frye Road in Chandler, Arizona, an eastern suburb of Phoenix, the 191,000-square-foot data center is 100 percent leased to a global data center services provider.
“There are more diverse buyers of data center assets today than ever before,” said Kristina Metzger, Leader of CBRE’s Data Center Capital Markets. “The Phoenix Flagship data center was attractive to foreign capital, institutional investors, and infrastructure funds, in addition to the historical, targeted data center investors.”
Phoenix was the second-most active data center market in the U.S. in 2018, with 41.5 megawatts (MW) of net absorption, according to CBRE’s U.S. Data Center Trends Report. Although new supply delivered, wholesale vacancy ended 2018 at 7.8 percent, nearing a two-year low. Metro Phoenix continues to attract data center investment given the region’s power capabilities, business-friendly environment and favorable climate conditions.
About CBRE Data Center Capital Markets
The CBRE Data Center Capital Markets team combines data center real estate sales, advisory, financing and investment banking into a single, global offering. CBRE Data Center Capital markets provides investors with acquisition, disposition and debt & equity recapitalization strategies. In addition, CBRE Data Center Capital Markets assists data center operators with strategic capital planning and advises enterprises in the disposition and structuring of sale leasebacks. The Data Center Capital Markets team integrates seamlessly with CBRE’s Data Center Solutions, the industry’s leading data center tenant advisory practice and CBRE Capital Advisors, the investment banking business of CBRE in the Americas. Please visit our website at www.cbre.us/datacentercapitalmarkets.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
About Principal Real Estate Investors
Principal Real Estate Investors manages or sub-advises $82.9 billion in commercial real estate assets (as of June 30, 2019). The firm’s real estate capabilities include both public and private equity and debt investment alternatives. Principal Real Estate Investors is the dedicated real estate group of Principal Global Investors, a diversified asset management organization and a member of the Principal Financial Group®.