This Industry Viewpoint was authored by Christof Hammerli, EVP at Landmark Dividend
Today’s landscape of global disruption has been affecting communities and businesses alike. In the aftermath of stay-at-home and quarantine policies, supply chain interruptions, event shutdowns, customer shortages and economic slowdowns, revenue is being hit hard for many enterprises. In some cases, this means struggling to make ends meet, keep employees paid and ensure doors stay open to deliver the services customers depend on.
The uncertainty of the situation can make navigating this business environment even more daunting — but new and strategic partners are emerging in the market, helping enterprises restructure their costs, free up capital, alleviate cost pressures and allow for more flexibility going forward.
As virtual capabilities, data volumes and demand for capacity are expanding to support digital business, opportunities for symbiotic partnerships between enterprises and data center infrastructure funds are being created. With plenty of capital still to allocate and aggressive investment strategies that remain largely unaffected by COVID-19, these infrastructure investors are well-positioned and eager to serve as a lifeline for businesses with underutilized data center assets.
Many businesses own data centers and have those facilities somewhat filled out with their own IT infrastructure and equipment — but many also have plenty of white space left over that is going unoccupied. This white space is a highly valuable asset that frequently doesn’t get capitalized on because taking time and resources away from core business competencies to sell data center space often isn’t optimal or feasible. Infrastructure funds are the financial allies that can help enterprises monetize the full data center asset through a partnership based on sale and leaseback.
Here’s what this looks like: the data center investor buys the facility outright (freeing up much-needed working capital for the enterprise) and the enterprise then leases their own portion back while the rest of the space is leased out to other tenants to fully monetize the space.
This presents a number of value-add opportunities for the enterprise. It not only allows business expenses to be restructured — removing the capital expenditures, converting costs to operational expenses and reducing carry costs — it also enables immediate access to funds that can then be reintroduced to core business goals and growth strategies.
From startups to the global 2000, every business is looking for creative ways to restructure, renew, offset the impacts of unforeseen circumstances and continue on the path of growth. Fortunately, opportunities are available if enterprises know where to turn to find the right partnership options.
Information about Landmark Dividend:
Landmark Dividend is a real estate and infrastructure acquisition and development company focused on acquiring mission-critical data center assets in North America and selectively across Europe, Asia and Central/South America. The company is building a diversified portfolio of enterprise, colocation/cloud, wholesale and switch data centers that generate long-term, escalating, contractual cash flows for investors.
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This has been happening for years, the DRT center in Trumbull CT was previously Built, owned by nasdaq, the advent of vritualization and decimalization changed the way they delivered market data and the space needed to do it, so they sold that facility to DRT. Another large data center in Middletown CT owned by an insurer Subleased A significant amount of space and power to another large insurer, cheaper than building new, very secure and resilient space, available within 90 days with minimal Interior construction.
Rationalizing assets is a continual part of what businesses do, even the telcos like Centurylink are now Repurposing leasing unused CO and 911 space for their edge computing efforts.