Starwood Capital Group has launched a dedicated unit for its data center investments.
The real estate-focused private investment firm recently announced the launch of Starwood Digital Ventures, a new platform dedicated to the group’s data center investment strategy.
The company said Starwood Digital will utilize funds from various Starwood investment vehicles to develop its pipeline as well as partner with data center operators.
Over the past five years, Starwood Capital has committed around $8 billion to data center development, totaling 1.5GW in various stages of development across Europe and the US.
"We are incredibly excited about the launch of Starwood Digital, which will provide us with additional opportunities to grow our data center portfolio amidst strong industry tailwinds," said Barry Sternlicht, chairman and CEO of Starwood Capital. "With the strong demand for data center services in the United States and growing needs to support end uses such as artificial intelligence, we see continued opportunity to invest in this growing sector.
As part of the announcement, Starwood has entered into a strategic alliance with Worldwide Mission Critical, a data center-focused consulting firm. The two companies have already worked on several projects together over the past five years. Starwood said the partnership will allow it to quickly scale its data center platform to support anticipated growth.
“We have worked closely with Worldwide Mission Critical [for] the last several years and look forward to deepening our relationship with the industry experts there, who have become valued partners of ours, as we leverage their skills and strong industry reputation to expand our data center investments both domestically and abroad generating compelling value for our investors," said Anthony Balestrieri, managing director at Starwood Capital.
Starwood Capital Group is a private investment firm founded in 1991 with a focus on global real estate. The company has around $115 billion in assets under management.
Starwood’s most notable data center investment to date is Irish developer Echelon DC. The company has six sites across Ireland and the UK in development or operation with a total potential capacity of up to 500MW.
Starwood is also reportedly planning a large data center campus in Herndon, Virginia, on the site of the former Commanders NFL team (formerly the Washington Redskins).
Last year, Starwood sold a Digital Realty-leased data center to GI Partners. Starwood is also said to be behind a proposed 30MW data center development in Alexandria, Virginia, that was blocked by county officials.
Last year Starwood launched capital raising for Starwood Distressed Opportunity Fund XIII, with an equity target of $10 billion. The global fund will reportedly allocate 20-30 percent towards data centers, suggesting Starwood aims to invest between $2-3 billion in the sector.
