Colony aims to sell as much as 90% of its $20 billion property portfolio of hotels, warehouses and other commercial real estate by the end of 2021, company officials said last week. Colony said it would use the proceeds to buy data centers, mobile phone towers and fiber and grow its digital real-estate investment management business.
Some in the real-estate industry view Colony’s move as a risky gamble. Data centers and mobile towers face the constant danger of obsolescence from new technologies like servers with higher storage capacities, satellites and faster 5G networks being built in the telecommunications industry.
Colony executives say that their strategy reflects the higher growth potential in the digital real-estate world. They predict that giants like Amazon.com Inc., Alphabet Inc. ’s Google and others will continue to have demand for data centers, transmission towers and fiber-optic cable in the future from such technologies as driverless vehicles, artificial intelligence and the Internet-of-things.
Thoughts?
I don't know much about datacenters, perhaps someone can elucidate--do Goliaths like $AMZN $GOOG $AAPL really not own their own datacenters? Datacenters will no doubt be useful in the future, but I was under the impression that the above companies would be the majority owners of them, and they'd lease space on their servers to smaller firms.
I know that Google is starting to develop their own, have seen job postings for development staff.
I've seen a ton Google and Amazon listings around northern VA. Definitely seems like it's popping off up here.
I'm really interested on the protocol with the tech giants in terms of in house work, do they have their own tech CapX and IT group that self performs the finer points of install? I'm sure they've got guys to do the infrastructure but once the C&S gets built, who renovates and keeps the servers up to date? The design redundancies in those systems have to be super crazy and I couldn't imagine some local IT cable pullers performing that kind of work. I might be wrong, who knows.
I can't imagine that datacenters are going anywhere anytime soon. I'd imagine you'd have to get really good at designing flexible spaces that are more "futureproofed" with new server technology and the electrical engineering that goes with it.
They do own some of their data centers - mostly in major markets - but also lease space in others. Think of it like Amazon last-mile deliveries. They need servers near their customers to reduce latency so that things like video streaming aren't buffering and laggy. This is a vastly oversimplified example - I'll do a separate post here with additional thoughts.
Interesting, I'm pretty ignorant to all of this but would love to learn more.
So I've been contemplating going back to school for an MBA focused on Business Analytics/Big Data/Machine Learning.
I am beginning to feel like more and more this is a wise choice because not many in the tech world understand the intrinsic of real estate finances and someone who knew both could be a unicorn...
Doubt the same guy that enjoys working on their hotel deals is ok completely shifting gears towards these niche digital real estate sectors. Prob going to be a ton of turnover.
Eh - not like they were core hospitality buyers. Guys over there are pretty nimble/sharp - going to be turnover but I think a lot will make the shift if there's space.
I always thought data centers were viewed as 'core' investements - infrastructure like. I worked at an infra fund where we looked at some potential data center investments.
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