Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. Buying a Home in These 7 States Gives You the Most Bang for Your Buck, www.cafemedia.com/publisher-advertising-privacy-policy, National Association of Real Estate Investment Trusts, Extensively researched articles in the areas of Real Estate Taxes, REITs, CREs, Regulation A and Learn more.Already a member? The company also broke ground last month for its third center in Singapore. © 2018 - 2021 The Motley Fool, LLC. It went public in 2013 and by 2015 Cincinnati Bell had sold out its stake. Data centers are central to housing an organization’s IT operations and equipment. Long-term trends appear to be good for the sector. Data center REIT shares have rewarded patient investors with gaudy price appreciation. The asset base has more than doubled, to $20.24 billion, and while there is $9.44 billion in debt on those assets, the debt-to-asset ratio has been improving. If you do a Google search for something and then buy it on Amazon, the request and response likely went through a data center owned by a REIT. QTS went public in 2013 and has since doubled in price, while the quarterly dividend has also doubled to its current 44 cents. This allows reader to sort the table (Yield / Gearing sort may be useful) or filter to a particular company to look at its data. It’s part of a larger trend in which the Cloud Czars are taking over the telecommunications market. This was a $34 billion market last year. Data Center REITs offer hosting, colocation and cloud on-ramps to enterprises and Internet Service Providers. Find out the details you need to know about tech and data center REITs. From real estate investing to architectural design and the latest housing trends, Carisa Chappell has been writing about all things … Millionacres does not cover all offers on the market. These types of data centres are known as colocation data centres. Sign in here. Equinix is headquartered in Redwood City, California, and operates in 52 markets around the world. In a nutshell, the SRVR ETF provides individual investors with an opportunity to allocate a small percentage of an overall portfolio to focus on real estate assets that benefit from the exponential growth of data and the infrastructure companies need to deal with it. It is, like the other REITs, a great long-term holding. For real-estate investment trusts, or REITs, that make money by hosting data, the more people pretend to work from home and watch Netflix, the better. Put Real Estate’s “Unfair Advantages” to Work for Your Portfolio. If you bought some shares five years ago, the current dividend would give you a yield of 5.75%. If you’re seeking both income and capital gains, you can find both in data center REITs. In 2018, Digital Realty had revenue of slightly over $3 billion, with net income of $341 million, meaning 11% of revenues became net income. Don’t just focus on the current yield. Equinix is not a huge acquirer, its most recent buy being Metronode in 2017. Nasdaq The data center REIT sector is relatively new compared to other REITs. 3 Megatrends (and 9 Stocks) to Buy for the ‘Blue Wave’. To a current buyer that’s a yield of just 2.17%. Equinix, Inc. (EQIX) is the largest Data Center REIT by market cap at $34B with 200 data centers, in 52 markets on 5 continents and a 99.9999% uptime record. QTS began life in Kansas, in 2003, expanded into Atlanta through a 2005 acquisition, and now has 25 data centers with 5.7 million square feet of rentable space. Smaller market caps can deliver big gains, as CoreSite shows, but there are downsides. The Ascent's Best Cities for a High Salary and Low Cost of Living -- How Does the Real Estate Measure Up? Of its 1,000 customers, almost a quarter are Fortune 1,000-size companies. The company’s total one-year return as of the end of September was 29.23%. This is key to successful income investing. A single transaction can transform an investor’s play from the weakest stock on the block to a big stake in one of the strongest. It has a market cap of $40 billion, and last year delivered $9.84 per share in dividends to its shareholders. You probably know that real estate has long been the playground for the rich and well connected, and that according to recently published data it’s also been the best performing investment in modern history. The Asian financial center had a much-publicized early success in containing the pandemic before an outbreak in dormitories densely packed with foreign workers, sending numbers soaring. Our commitment to you is complete honesty: we will never allow affiliate partner relationships to influence our opinion of offers that appear on this site. Some speculators are betting CONE will be acquired, which keeps the price of the stock up. Access to timely real estate stock ideas and Top Ten recommendations. Data Center Real Estate Investment Trusts (REITs) manage, develop and own data center facilities, offering solutions to individuals along with small, medium and large companies. Data Center REITs suffered a bit of a rough patch in 4Q18, as investors feared over-building in the sub-sector as many of the REITs began construction of speculative projects. As of this writing he owned shares in AMZN. There are five data center REITs in the market today and they're primarily based in the United States. All rights reserved. All rights reserved. The small size of CoreSite Realty, relative to Digital Realty and Equinix, does give it some big advantages, in the form of capital gains. Data Centre REITs are real estate investment trusts that invest primarily in properties that house storage systems, computer systems and other associated components. Copyright © 2021 InvestorPlace Media, LLC. Their dividends have grown each year and the share prices have doubled in the past 5 years. Three data center REITS follow and are perhaps the optimal place to be for strong alpha potential and respectable dividends. The vaccine-driven sector rotation within the REIT sector has further pressured these "work from home winners." The company also expects to see more demand in the European markets. CoreSite was born from two “telecom hotels,” as they were called then, in 2001, in San Francisco. It bills itself as offering “hybrid cloud solutions,” with its close connections to big clouds like Amazon and Microsoft, and colocation services for enterprises building their own cloud systems. Data Center REITs - the best-performing property sector of 2020 - have stumbled over the last quarter as lukewarm earnings results and intense competition have clouded the outlook for 2021. Simply click here to learn more and access your complimentary copy. Learn more! Its DC1 building in Virginia was the first large greenfield center to open, 20 years ago, back when such centers were mainly selling themselves as a way for corporations to speed data flows for things like video conferencing, or as alternatives to the Network Access Points (NAPs) that then dominated internet switching. There are five data center REITs in the market today and they're primarily based in the United States. [Editor’s note: This story was previously published in April 2019. Most data center REITs were founded around 2000 and make up a small percentage of REITs overall. Dana Blankenhorn is a financial and technology journalist. A real estate investment trust (REIT) is dedicated first to income. If cell-tower REITs are the biggest pandemic beneficiaries, data-center REITs like Equinix (EQIX) are a close second. This means it’s unusual to find REITs that also offer capital gains. Digital Realty recently expanded its presence in Northeast Asia with a 129,000-square-foot, carrier-neutral facility in Seoul. Equinix continues to grow its international footprint, most recently with a new Australian center. It was founded in 1998, as the internet was primed to revolutionize how people interacted and shared information. But five years ago, the stock was trading at $172 per share. This REIT had a one-year total return of 36.93% at the end of September. The data center REIT launched in 2001 and represents more than 40 industries. Learn More.Already a member? The colocation market alone continues to grow at 10% each year, driven by the needs of the Cloud Czars, according to Synergy Research. Then read our guide on 5 Important Factors You Need … And with a set of unfair advantages that are completely unheard of with other investments, it’s no surprise why. Need help interpreting the REIT data? Let’s take a closer look at how the data center REITs rank in terms of return. Data center REITs can be a relatively low-risk way to invest in the technology industry. 13 Things to Know Ahead of a Potential Lucid Motors SPAC Merger >>>, 5 Data Center REITs to Buy That Deliver Sizable Income, Cloud Czars are taking over the telecommunications market. All this makes Equinix one of the best data center REITs to buy. 2021 InvestorPlace Media, LLC. Data center REITs invest in real estate that's used to store computing infrastructure. 1125 N. Charles St, Baltimore, MD 21201. But that means that other companies’ shareholders aren’t getting a big chunk of your gains and that the stock isn’t being watered down with new shares. CoreSite went public in 2009, and then began expanding internationally, starting in London. Keppel DC REIT, the first data centre real estate investment trust (DC REIT) listed in Asia, invests in a diversified portfolio of income-producing real estate assets used primarily for data centre purposes. That represents a yield of 3.91%, and the company’s market cap stands at $2.82 billion. CyrusOne wasn’t publicly traded until 2013. Data centers trade at 94% of net asset value, versus 100% for REITs overall. To get started, we’ve assembled a comprehensive guide that outlines everything you need to know about investing in real estate - and have made it available for FREE today. Related: Data Center REITs Soar Back After a Bruising 2018. Real Estate Investing: 10 Ways to Build Wealth. The new benchmark, which has been added to the widely-tracked FTSE Nareit U.S. Real Estate Index Series, includes listed REITs from the infrastructure, data center, and … Internet traffic is the primary driver of data-center-REIT performance. Data Center REITs and Economic Conditions. The question now is whether all the good news has already been baked into the share prices. Did Elon Musk Tweet Have Investors Piling Into SIGL Stock? There are opportunities here, both in the success of its strategy shift and its continuing weakness, which could make it a prize for a larger company. To learn more about CafeMedia’s data usage, visit: www.cafemedia.com/publisher-advertising-privacy-policy. The company’s assets are worth over $23.7 billion, with $11.1 billion in debt, a slight improvement over 2014. Copyright © How to Buy Your First Investment Property With 5% Down (Or Less), These REITs are Immune to the Coronavirus' Impact, Cities and States That Have Paused Evictions Due to COVID-19, The Metros Where Retail CRE will be Hit the Hardest. Signal Stock Confusion? 1125 N. Charles St, Baltimore, MD 21201. Data Center REITs and Digital Infrastructure Companies are subject to risks associated with the real estate market, changes in demand for wireless infrastructure and connectivity, rapid product obsolescence, government regulations, and external risks including natural disasters and cyberattacks. The adoption of 5G will accelerate the rise of digital economy and the consumption of data. They act as a sort of glue among the Cloud Czars, like Amazon (NASDAQ: AMZN ) … Digital Realty’s one-year return was 19.64% as of the end of September. Here is the story on the four major names in the space. *By submitting your email you are agreeing to our Terms & Conditions. quotes delayed at least 15 minutes, all others at least 20 minutes. QTS Realty Trust (NYSE:QTS) made that kind of shift in 2017, moving from managed services to being a “cloud on-ramp.” The company insisted the new plan would mean big new opportunities, but these have taken time to develop, with repeated misses on earnings estimates taking a toll on the stock. Founded in 2001, it was bought by private equity players ABRY Partners in 2007 and then by Cincinnati Bell, a small phone company, in 2010. Investing in them can provide steady returns as this sector grows. Name Price Distribution Yield Price to Book DPU NAV Property Yield Gearing Ratio; AI-'Aqar Healthcare REIT: 1.31: 5.95%: 1.01: 0.0780: 1.302: 6.37%: 40.9%: AI-Salam REIT If you’re on the right side of a trend, you are almost certain to prosper. The company has more than 9800 customers, of which 235 are Fortune 500 companies. A strategic shift can take a stock down hard. Data Center REITs offer hosting, colocation and cloud on-ramps to enterprises and Internet Service Providers. It’s expected to raise the dividend again, to $1.29 per share, later this month. One of the good things about data center REITs is that their growth isn’t dependent on consumers spending money. Will the Covid 19 Crisis Push Home Values Lower? As of yesterday’s close it had a market cap of $26 billion, and last year delivered $4.32 per share in dividends to investors. The data center REIT said the rollout of 5G should translate into increased demand for the next decade. It has since been updated and republished.]. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. The company’s one-year return was 15.15% as of the end of September. Milena Petrova, associate professor of finance at Syracuse University's Whitman School of Management, said in an interview with U.S News earlier this year that data centers are a safer bet than investing in technology stocks. “The attractiveness of data REITs is in their high dividend yield, in contrast to most firms in the tech sector,” she said. Become a diversified real estate investor without ever talking to an agent or swinging a hammer. Data centre REITs have exhibited fantastic growth since their existence more than a decade ago. That’s a yield of 3.55%. This Overland Park, Kansas, real estate investment trust has 25 data centers throughout North America. A modern data REIT must acquire land and build ahead of demand, competing with other REITs, private equity companies trying to build new REITs from scratch and the cloud owners themselves. Data centre real estate investment trusts (REITs) are companies that own real estate for the purpose of housing data centres. Like QTS Realty Trust, CyrusOne (NASDAQ:CONE) is an underperforming company that is said to be attractive to acquirers. The data centers hosted by REITs aren’t all cloud-based, but they usually require connections to clouds. Analysts forecast that investors expect more digital connections to drive hybrid cloud commuting and interconnectivity. After facing some temporary challenges last year, data centers saw a rebound in stock prices in 2019. The Singapore REIT, which wants to acquire data centers in North America, has handed 30% returns to investors over the past year. CyrusOne Inc. is based in Dallas, Texas and has approximately 45 data centers worldwide. Sign up for Real Estate Winners to create a wealth-building strategy today. Yesterday it closed at $480. They act as a sort of glue among the Cloud Czars, like Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT). Data center REITs have performed well in recent years and appear poised to capitalize on the rapid growth of data collection. The company had a one-year return of 27.83% at the end of September. Find Out More. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Data centers are one type of property you can invest in but other sectors of REITs include apartments, retail, and offices. Brad Thomas of iREIT Investor notes that, while Digital Realty is an aggressive acquirer of data centers, it doesn’t account for acquisitions aggressively, which means it’s not stressing its balance sheet at the expense of the long term. Publicly traded data center providers continue delivering incredible returns year … We do receive compensation from some affiliate partners whose offers appear here. Its early expansion was funded by the Carlyle Group, a private equity firm. This can be the downfall of retail and hotel REITs. Compensation may impact where offers appear on our site but our editorial opinions are in no way affected by compensation. Digital Realty Trust (NYSE:DLR) was formed as a public company in 2004 out of 21 data centers acquired out of bankruptcy by GI Partners, a private equity firm. The five data-center REITs are CoreSite Realty Corp. (ticker: COR ), Digital Realty Trust ( DLR ), Equinix ( EQIX ), CyrusOne ( CONE) and QTS Realty Trust ( QTS ). CoreSite Realty Corporation, located in Denver, Colorado, has data centers in eight markets in North America. Thomas calls Digital Realty’s global footprint a big advantage, and its size let it carry $236 million of empty land in fast-growing northern Virginia on its balance sheet. But I’ve found REITs to buy whose prices tend to rise over time . CyrusOne was founded in 2001. The digital economy has experienced exponential growth, and Cisco Systems expects this pattern to continue through several coming years. Learn More. It now has 214 centers with 34.5 million square feet of rentable space in the U.S. and Europe. That dividend yields a fat 4%. must acquire land and build ahead of demand, 7 Hot Stocks That Will Keep You Energized With 3%-Plus Yields, Louis Navellier and the InvestorPlace Research Staff, 4 3D Printing Stocks Leading the Fourth Industrial Revolution, Why Novavax Stock Is Bound for Massive Gains in 2021, Ethereum 2021: ETH Rises 800%, and More Gains Are Coming. Data source: National Association of Real Estate Investment Trusts. CoreSite is the right stock for you if you’re mainly looking for exposure to the U.S. internet market. This San-Francisco-based REIT has data centers based throughout North America, Europe, Asia, and Australia. Executives say recent strategic acquisitions have led to significant growth in their colocation and interconnection capabilities. Data Center REITs pay an average dividend yield of 2.3%, which is below the REIT sector average dividend yield of around 3.4%. But the company quickly came back for more, buying Ascently, based in Brazil, last year for $1.8 billion. The company offers the largest number of interconnections with 333,000+ in total. It was founded in 2003 and has been an advocate for data centers in the Midwest. Give you a yield of just 2.17 % place to be attractive to acquirers retail... A slight improvement over 2014 on-ramps to enterprises and internet Service Providers Reluctant Detective Finds Her Family, available at! 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