A SALE-LEASEBACK TRANSACTION WITH ICG
Data center service provider Iron Mountain, has just announced the sales of a portfolio of five facilities to Intermediate Capital Group (ICG) for approximately $178 million.
As announced, the transaction gives ICG a new data center portfolio of about 550,000 square feet which are located in the greater London area. Since it is a sale-leaseback transaction, Iron Mountain will remain in these facilities under an initial 12-year lease term, with options to renew up to an additional 20 years.
“With our strong development pipeline together with highly attractive market valuations for industrial assets, we are pleased to continue our capital recycling program,” said Barry Hytinen, executive vice president and CFO at Iron Mountain.
“The sale-leaseback of these assets allows us to generate significant investable proceeds while essentially maintaining long-term control of the facilities. On a leverage neutral basis, we estimate this transaction will generate nearly $140 million of capital, which we intend to invest in higher growth areas, including our data center business.”
As mentioned by Barry, this transaction is part of Iron Mountain’s ongoing capital recycling program, and the company expects to utilize the proceeds to reinvest in other growth areas of its business. This announcement is coming about few weeks after the company disclosed it plans to develop a new 27MW facility in Slough, London.
“The Iron Mountain portfolio is a prime example of the mission critical real estate that ICG’s Sale and Leaseback fund is seeking to invest in. This represents the fund’s third transaction in 2021 and second transaction in the UK, following the 2.94m square feet forward funding of Jaguar Land Rovers new facility at Mercia Park, earlier this year,” said Chad Brown, Director at ICG.
For this transaction, ICG was advised by their asset management partner Marchmont Investment Management and CBRE while Iron Mountain was advised by JLL.