Report: Macquarie Seeking Stake in Netrality Data Centers

Sept. 3, 2019
Bloomberg reports that infrastructure fund Macquarie is seeking a deal to buy a stake in Netrality Data Centers, which operates carrier hotels in major cities.

Global infrastructure fund Macquarie is reportedly close to expanding its data center holdings. Bloomberg reported Friday that an affiliate of Macquarie is nearing a deal to buy a stake in Netrality Data Centers, which operates carrier hotels and data centers across the United States. The financial news service characterized the talks as “advanced.”

Netrality is a real estate company built atop the power of the cross connect – the physical connection between networks that knits the Internet together.

Netrality was launched in 2015, with a vision for acquiring carrier hotels and upgrading their interconnection infrastructure to boost the flow of data between carriers, network operators and content specialists.

Macquarie’s interest in the data center sector is part of its growing focus on digital infrastructure. Macquarie Infrastructure Partners (MIP) is also a major investor in Aligned Energy, providing the financial respources to help the company expand its data center footprint and executive team, and innovate in data center construction and sustainability.

This morning it was announced that Macquarie Infrastructure Partners has acquired Bluebird Networks, a telecom and fiber provider serving the Midwest United States.

Recent investments by Macquarie and other infrastructure funds like Brookfield Infrastructure and Stonepeak Infrastructure Partners have the potential to speed the industrialization of the data center, streamlining the delivery of capacity to support the growth of cloud computing.

Funds like Macquarie have traditionally invested in projects like airports, utilities and toll roads, but are now shifting their focus to digital infrastructure, citing extraordinary demand for capital to fuel the shift to a data economy.

Carrier Hotels in Focus

Netrality is a joint venture between Amerimar and industry veteran Hunter Newby, and has acquired buildings in Philadelphia, Chicago, Houston, Kansas City and St. Louis. The company, named for its focus of networks and neutrality, is creating advanced meet-me rooms in each property.

Meet-me rooms are common areas where providers can make connections between their networks. These interconnection facilities can be operated by building owners, non-profits or commercial service providers.

The Bloomberg report comes in a period of active investment in carrier hotels.

  • In April, American Tower bought Colo Atl, a colocation and meet-me room business in downtown Atlanta, saying it saw the investment as an opportunity to evaluate connected colocation as a future growth opportunity.
  • Equinix  acquired the Dallas Infomart for $800 million last year, and is investing an additional $138 million to add a second building at the property. Equinix is also  investing $60 million in an expansion of the NAP of the Americas in Miami, the primary carrier hotel in south Florida.
  • DataGryd has just completed is new space within 60 Hudson Street, the most prominent carrier hotel in Manhattan.
  • A 2017 renovation at One Wilshire, the leading carrier hotel in Los Angeles, brought infrastructure upgrades that will add up to 28 megawatts of power capacity for the 30-story building.

Carrier hotels were the early cornerstones of the Internet economy, and some of the most successful properties in the colocation industry. A key piece of the business model is the meet-me room, a common area where providers can make connections between their networks. Interconnection facilities can be operated by building owners, non-profits or commercial service providers.

The term “carrier hotel” dates to the Telecommunications Act of 1996, which cleared the way for competition in the telephone and Internet business. The act cleared the way for competitors to access the network by colocating infrastructure within the Bell companies’ facilities. Shortages of access and trust prompted the newcomers to a new strategy: leasing space in buildings adjacent to the incumbents’ central offices in major cities. Dozens of carriers and network operators soon bought up space inside buildings like 60 Hudson Street in Manhattan and One Wilshire in Los Angeles, coining the term “carrier hotel.”

Earlier this month Bloomberg reported that CyrusOne was considering a potential sale, but no transaction has materialized.

About the Author

Rich Miller

I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

Sponsored Recommendations

Guide to Environmental Sustainability Metrics for Data Centers

Unlock the power of Environmental, Social, and Governance (ESG) reporting in the data center industry with our comprehensive guide, proposing 28 key metrics across five categories...

The AI Disruption: Challenges and Guidance for Data Center Design

From large training clusters to small edge inference servers, AI is becoming a larger percentage of data center workloads. Learn more.

A better approach to boost data center capacity – Supply capacity agreements

Explore a transformative approach to data center capacity planning with insights on supply capacity agreements, addressing the impact of COVID-19, the AI race, and the evolving...

How Modernizing Aging Data Center Infrastructure Improves Sustainability

Explore the path to improved sustainability in data centers by modernizing aging infrastructure, uncovering challenges, three effective approaches, and specific examples outlined...

iStock, courtesy of AFL

Hyperscale: The AI Tsunami

AFL's Alan Keizer and Keith Sullivan explore how AI is driving change and creating challenges for data centers.

White Papers

Dcf Afl Sr Cover 2023 01 09 12 22 13
Dcf Afl Sr Cover 2023 01 09 12 22 13
Dcf Afl Sr Cover 2023 01 09 12 22 13
Dcf Afl Sr Cover 2023 01 09 12 22 13
Dcf Afl Sr Cover 2023 01 09 12 22 13

How Four Efficiency and Density Points are Reshaping Data Center Network Architecture

Jan. 9, 2023
In a world connected by digital infrastructure, new network considerations must be taken to ensure optimal performance, efficiency, and sustainability