Investment Date: December 2016
Description: Compass Datacenters develops and owns wholesale data center facilities, leveraging a success-based, build-to-suit capex model, which is supported by long-term leases with attractive counterparty tenants. Since inception, Compass has experienced significant growth through a combination of leasing, new market expansion, greenfield development, and M&A, which has transformed the company into one of the largest data center providers in North America.
Investment Partners: Ontario Teachers’ Pension Plan, Azrieli Group
RedBird’s Value Add: The RedBird team leveraged its deep sector expertise, working closely with Management on multiple value creation levers and company-building initiatives, which has led to an 8x+ increase in portfolio value. Today, Compass is one of the largest developers and owners of wholesale data centers, and the company is a key partner to many of the world’s largest cloud and technology providers.
Team & Relationship Network: RedBird’s investment in Compass Datacenters was sourced through a long-standing relationship with Founder & CEO Chris Crosby. Since the initial investment, RedBird has helped source key hires to expand the senior management team. In 2019, the Azrieli Group (TASE:AZRG), the largest real estate company in Israel and majority owned by the Azrieli family, made a strategic investment into Compass, becoming a value-add partner to the company and to RedBird.
New Development Leasing & NOI Growth: As Compass has expanded into new markets and developed additional facilities, property-level NOI has increased 5x under RedBird’s ownership to support both new and existing customer growth. Looking ahead, the company is well-positioned as a direct beneficiary of the continued rapid growth in cloud computing and data demand needs.
Portfolio Expansion and M&A: Compass is now one of the largest privately-owned wholesale data center platforms in North America. The company has executed multiple strategic acquisitions, most notably the acquisition of Root Datacenters in Montreal (July 2019). Compass’s current portfolio includes nine markets with a diversified mix of leading cloud, software, and enterprise tenants.
