Colony Capital Exits Industrial Market With $400M Sale
Colony closes the $400 million sale of the Colony Bulk Industrial Portfolio, the final step in the firm’s exit from the industrial market.
Colony Capital has officially exited the industrial market. The firm has closed the sale of the Colony Bulk Industrial Portfolio for $400 million in value, generating $85 million in net equity proceeds. The sale was the final step in the REIT’s exit from the industrial sector.
Over the last few years, the firm has been selling off its legacy assets in order to focus on digital real estate and digital infrastructure.
“We made terrific progress on our digital transformation this quarter,” said Marc Ganzi, president and CEO during its third quarter earnings report. “Bringing high-quality digital assets onto the balance sheet, growing our digital investment management franchise, and harvesting value from our legacy assets are our key priorities.”
He pointed to three major deals this past quarter: DataBank’s acquisition of zColo, closing the Vantage hyperscale data center acquisition and the sale of its hospitality business. “When you combine those milestones along with a strong recovery in our underlying businesses, we returned to positive Core FFO ex-gains,” he added.
In September, Colony sold six hotel portfolios totaling 22,000 rooms and 197 properties to Highgate in a transaction valued at $2.8 billion. The deal generated $67.5 million of gross proceeds on a consolidated basis and the assumption of $2.7 billion in consolidated investment-level debt. This sale marked the firm’s exit from the hospitality market, and the firm’s hospitality segment has been reclassified into discontinued operations, according to the third quarter earnings report.
At the half year, Colony sold a total of $90 million in other assets, boosting the firm’s monetization efforts.
At the same time, Colony has been ramping up acquisitions that fit the firm’s new digital infrastructure strategy. The firm now has $23.3 billion in digital assets under management, 50% of its total managed assets. In July, a consortium led by Colony acquired a 90% stake in Vantage Data Centers’ portfolio of stabilized North American hyperscale data centers for $1.4 billion, and in September, DataBank, a portfolio company under Colony’s umbrella, acquired zColo for $1.4 billion.