Realty Income Corporation and Cloud Capital have created a new joint venture with a global institutional investor focused on stabilized hyperscale data center assets. The partners disclosed that the venture is targeting a diversified portfolio and has already committed to acquire three data center properties. The initial seed portfolio tied to these commitments is valued at more than $6 billion, underscoring the scale of the strategy around large-format digital infrastructure.
According to Realty Income president and CEO Sumit Roy, the joint venture centers on data centers leased to investment-grade tenants under long-duration triple-net leases. He described the mix of asset quality, credit tenancy, and lease structure as consistent with Realty Income’s approach to disciplined capital allocation and value creation. Roy highlighted the return profile of the initiative as attractive in the context of the company’s investment criteria, emphasizing that the assets are stabilized and supported by long-term occupancy commitments.
Cloud Capital founder and CEO Hossein Fateh framed the partnership around his firm’s long history in the sector, citing more than three decades of experience investing in and leasing some of the world’s largest data centers through multiple market cycles. He pointed to the importance of acquiring and developing high-quality facilities and maintaining durable tenant relationships as a core element of the strategy. Fateh added that the partners view the targeted portfolio as a way to gain exposure to highly strategic data centers that are benefiting from accelerating demand tied to cloud and AI applications.
As part of the initial phase of the transaction, Realty Income will acquire a 45% interest in the first portfolio asset. That property is described as a stabilized hyperscale data center located in Northern Virginia’s well-known “data center alley.” The facility is fully leased to an investment-grade hyperscale tenant under a long-term triple-net lease, aligning with the venture’s focus on creditworthy occupancy and extended lease duration. While further details on the remaining assets and the joint venture’s broader acquisition pipeline were not disclosed, the announcement signals an organized push by the partners into large-scale digital infrastructure.
