Benzinga | Jan 19, 2022 09:07AM EST

CyrusOne Enters Agreement For Sale Of Four Houston Data Center Assets For ~$670M

CyrusOne Inc. (NASDAQ:CONE), a premier global data center REIT, announced today it has entered into a definitive agreement with DataBank Holdings Ltd. ("DataBank") for the sale of its four Houston data center assets. Under the terms of the agreement, DataBank will acquire the Houston West I, II and III and Houston Galleria data centers from CyrusOne. Additionally, CyrusOne will lease back from DataBank the Houston West III shell to support a lease signed with a hyperscale customer in the fourth quarter of 2021.

Total 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 third quarter 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%.

"We are excited to execute on our capital recycling initiative to fund our continued growth," said David Ferdman, Interim President & Chief Executive Officer. "This divestiture further optimizes our portfolio as we redeploy capital into accretive developments across core markets with diverse hyperscale 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."

The divestiture is expected to close by the end of the first quarter of 2022, subject to customary closing conditions.

DH Capital, LLC and DLA Piper LLP served as CyrusOne's exclusive financial and legal advisors, respectively, on the transaction.