north america

Data Takes Center Stage

Thriving technologies such as virtual reality, artificial intelligence, and cloud computing are leading to rapidly increasing global demand for faster connectivity and data storage.

Though still considered a relatively young asset class, investor appetite for data centers—the gigantic warehouses that hold vast numbers of computer servers that store, process, and distribute data—continues to grow in line with technology, which has impacted upon many areas of modern life and business. 

North American data center investment volume totaled more than $12 billion in 2018 (inclusive of single-asset, portfolio and entity-level transactions), according to CBRE research. Capital availability remained abundant throughout the year, with 33 percent of total investment volume focused on single-asset and portfolio transactions. This year’s volume is anticipated to total more than 2018 levels with several large M&A transactions closing.

Kristina Metzger, who oversees the Data Centers specialty practice for Capital Markets at CBRE, focuses her time advising domestic and offshore investors in the disposition and acquisition of these properties across North America.

Metzger has extensive knowledge and experience in data center real estate, having represented clients in transactions totaling more than $3 billion. Capital Watch caught up with Metzger to discuss this growing sector of commercial real estate that is rapidly moving into the mainstream, her career to date with CBRE, and how she balances work and family. 

What Does Your Role at CBRE Involve?

I collaborate with our investment sales, Debt and Structured Finance, and colleagues in the data center leasing space on the acquisition, disposition and recapitalization of data centers and telecom facilities across North America. I also work with our Global Workplace Services account relationships to execute monetization strategies for enterprise-owned facilities.

What is CBRE’s approach to Data Centers Capital Markets?

We engage the best team of diverse subject matter experts on each and every project. This often times means collaborating with our local office or industrial professionals, market leasing specialists, as well as data center facilities management and construction management. I am continuously impressed and motivated by the industry-leading talent at CBRE and so grateful to be able to work with these leaders.

What’s Been Your Biggest Success This year?

Growing CBRE’s market share and presence. In our first 12 months, we will achieve a 400% increase in transaction volume in data center asset sales. Our high percentage of the overall market share gives us a distinct advantage in driving value for our clients and achieving the best outcomes.

What’s Been Your Biggest Challenge?

Getting the word out about CBRE’s capabilities in the data center capital markets space. It is widely understood within the data center community that CBRE is the world’s largest data center facilities manager and we have a great team of real estate leasing specialists. Our access to global capital and investment banking capabilities are less known. We are working tirelessly to grow our brand recognition in these areas. 

Are There Any Industry Misconceptions About the Sector That Need to Change?

I am frequently asked if cloud computing will eliminate the need for data center facilities moving forward. It is quite the opposite. Cloud computing is driving the need for more data centers. As we all increasingly access information remotely all of that data needs to be stored. Around 90% of the world’s data was created in the last three years – the data center market continues to see exponential growth as a result.

How Do You Achieve a Successful Work/Life Balance?

I am fortunate to have a great support network of friends and family both inside and outside of the office. Our household is very dynamic as my husband and I both work full-time and equally parent our two sons, Gavin (3) and Conor (1). We would not be able to do it without the great support of close friends, family and incredible colleagues. Our boys do a great job of keeping me balanced and reminding me what is most important, to stop and smell the roses, or in our case, to run around and play in the dirt.

Investors Hungry for North American Real Estate

The CBRE North America Investor Intentions Survey 2015 reveals a clear picture of the current confidence and enthusiasm of commercial real estate investors in the region. As with the prior year, investors view the North American market as very favorable for investment, with a large group of investors intending to increase property acquisitions in 2015.

Key Findings:

• Half of all real estate investors in North America intend to increase their property acquisitions in 2015.

• Investors identified increased competition and the challenge of finding appropriately-priced assets as the greatest—and only—obstacle to investment in 2015.

• The most compelling targets for investors in 2015 include most core markets—San Francisco, New York, Los Angeles, Seattle, Washington and Chicago.

• Investors remain interested primarily in industrial, office and multifamily assets.

• Among niche property types, senior housing and healthcare are increasingly appealing.

To download the full report, click here

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