DigitalBridge Group (NYSE: DBRG) is unique among digital infrastructure real estate investment trusts (REITs). Its mix of infrastructure assets, its global operating footprint and its “invest, operate and build” methodology set DBRG apart from other REITs in the communications business.
DBRG reported consolidated digital revenues of $236 million in 2Q21, up nearly three times over the $63 million in 2Q20. The total is a combination of digital operating revenues of $189 million and $47 million for investment management fees raised by its Digital Colony Partners II (DCP II) fund which is the company’s primary investment vehicle for acquiring or investing in new infrastructure assets.
At the end of the quarter, with nearly $50 billion total assets under management (AUM), the company reported $35 billion digital AUM or roughly 72 percent of its goal of “rotating” to 100 percent digital AUM.
DBRG says that it is ahead of plan to finish its planned asset rotation “from diversified to digital.”
On a pro forma basis, the company is at over 85 percent digital AUM following second quarter announcements of its Other Equity & Debt portfolio sale and the internalization of Colony Credit Real Estate (formerly CLNC).
DBRG earlier sold off its office building and hotel properties and now is shopping its senior living homes (Wellness facilities) which it has classified as discontinued operations for accounting purposes The company expects to reach its 100 percent digital AUM goal in 2022.
DBRG updated guidance to indicate it expects by 2023 to achieve $400-500 million on digital operating revenues and $180-230 million in digital fee revenues with digital operating EBITDA in the $175-225 million range and positive Core FFO.
The company expects these significant growth targets for 2023 “will be achieved primarily through new acquisitions with $1.5-1.75 billion anticipated deployment from recycling capital from legacy business units.”
With recent investments in Asia, as Inside Towers reported, the company now operates on four continents – North and South America, Europe and Asia. Acquisitions made in 2Q21 bring its digital infrastructure portfolio to 22 companies in those various regions.
DBRG owns and manages infrastructure in five asset classes-towers, small cells, fiber, data center and edge infrastructure. It now operates over 30,000 towers. That number scales up to over 400,000 sites when rooftops, billboards and other support structures are counted. As well, there are over 80,000 small cell nodes that already are on-air or are in the backlog.
DBRG’s fiber network spans 130,000 route-miles. Moreover, the company operates over 100 hyperscale and Enterprise co-location data centers along with more than 400 edge facilities.
DigitalBridge adopts an “invest, operate and build” method that it executes with an experienced management team. The company points out that all of its companies in every region continue to build and expand “next generation networks that support the proliferation of 5G and IoT-enabled devices.” For instance, the company builds over 500 new towers a year.
DBRG was active in 2Q21 with five strategic investments announced or closed that added over 9,000 towers including Edgepoint Infrastructure’s Asian tower platform where there is strong growth in the region.
Agile Data Centers provide DBRG with an Asia Pacific hyperscale platform to capitalize on persistent, strong growth in cloud infrastructure demand across AsiaPac region.
In addition, the deal to acquire PCCW Data Centers Asia brought in the leading Hong Kong-based data center business to anchor regional strategy. PCCW brings a strong development pipeline with significant expansion capacity to serve growing regional demand from hyperscalers and large enterprises.
In the U.S., DBRG acquired, and took private, Boingo, a leading indoor and large venue wireless solutions provider that utilizes small cells and DAS.
DBRG also acquired Atlas Edge Data Centers, European ‘edge infrastructure’ in a joint venture with Liberty Global. These edge data centers are designed to bring connectivity closer to consumers and enterprises, with low latency for improved customer experience.
DBRG sees significant opportunities to extend its reach across Europe and to partner with other technology companies and telcos to deliver value-added services with integrated infrastructure solutions.
By John Celentano, Inside Towers Business Editor
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