Colony Capital buys Digital Bridge for $325m

The real estate firm and digital infrastructure manager raised a fund together which closed on $4.05bn in June.

Real estate firm Colony Capital has acquired Digital Bridge for $325 million, bringing in-house a $4 billion telecommunications and data infrastructure fund the two sides closed together earlier this year.

The deal comes nearly two months after their joint venture Digital Colony Partners closed on $4.05 billion, including a $300 million GP commitment. Marc Ganzi, founder of Digital Bridge, a Boca Raton, Florida-based company, will become chief executive of Los Angeles-based Colony Capital, while Tom Barrack, the firm’s founder, will become executive chairman.

Colony Capital and Digital Bridge declined to comment for this story.

Colony Capital is paying for two-thirds of the acquisition with cash. The rest will be paid for by units of LP interests in the firm’s operating partnership, according to a statement. The deal brings Digital Bridge’s $20 billion portfolio of 349,000 telecom sites and 39 data centres into Colony Capital’s now $60 billion of managed assets.

The two companies came together last year to raise money for investments in digital infrastructure. The sector is seen as having high-growth potential as industries move to cloud-based data management and access to mobile networks continues to increase.

“As our experiential world gives way to a new future – a data-driven world – real estate in its current format with long-dated contractual revenue streams from traditional tenants will have to change and adapt or face substantial obsolescence,” Barrack said in the statement.

Digital Colony Partners has deployed nearly $1 billion in capital in four investments to date, including a $200 million investment in Latin American telecoms operator Andean Telecom Partners and a $275 million acquisition of Finnish broadcast tower operator Digita. The fund has also backed Freshwave Group, a UK telecom platform, and Toronto-based Peer 1, a colocation services company.