Colony Capital has shed $535m (€440m) worth of real estate assets to Fortress Investment Group as the company strives to focus exclusively on digital infrastructure.
Marc Ganzi, who took over as CEO of Colony Capital when it merged with Digital Bridge in 2019, described the sale as a “watershed moment” in the firm’s efforts to “rotate to a fully-digital business”.
Colony Capital said it had sold the bulk of its non-strategic Other Equity & Debt (OED) Portfolio, resulting in digital infrastructure representing 80% of its $46bn in assets under management.
It takes monetisation of Colony Capital’s non-strategic assets year-to-date to $790m, exceeding its target for 2021 of $400m to $600m.
The firm said the transaction also increased its investment firepower and reduced its leverage and complexity.
“Not only are we freeing up over a half-billion dollars to redeploy into digital, we’re simplifying our business, making it easier to manage and to understand,” said Ganzi.
Details of the assets in the portfolio were not disclosed, but Fortress managing director Noah Shore described it as a “win-win transaction” and said it was a “perfect fit with our existing business and our deep wells of experience and expertise in managing highly complex investments across a full range of asset types, structures, industries and geographies”.
Ganzi added: “Fortress is a world-class organisation, so I know these assets will be stewarded in the most responsible way going forward, allowing us to maintain our singular focus on building the most compelling digital infrastructure REIT in the world.”