Cloud Capital and Realty Income Launch $6 Billion Data Center Joint Venture
July 1, 2026
Cloud Capital and Realty Income Launch $6 Billion Data Center Joint Venture
Cloud Capital and Realty Income have announced a new joint venture aimed at investing in data center assets, marking a significant collaboration between a specialized investment manager and a major real estate capital provider. The partnership, which also includes an unnamed global institutional investor, is seeded with three hyperscale data center facilities in Northern Virginia, one of the world’s largest data center markets.
The newly formed Core Joint Venture Strategy has committed to acquiring a portfolio of stabilized hyperscale assets leased to investment-grade tenants under long-duration, triple-net leases. The three facilities in Northern Virginia are leased to hyperscale tenants for terms ranging from 15 to 20 years on a triple-net basis, though full details of the properties have not been disclosed. Realty Income expects to invest up to $1.4 billion in the venture, with initial investments of approximately $700 million anticipated to be funded between the second and third quarters of 2026.
Under the structure of the deal, Realty Income will acquire an initial 45 percent interest in the first stabilized data center, and will take similar stakes in the other two facilities, which are currently in development. Cloud Capital will hold a minority investment in the overall portfolio. CloudHQ, Cloud Capital’s sister company and a data center developer and operator, will provide property management and development management services to the portfolio. Going forward, the venture plans to target additional investments across the United States and Europe.
Founded in 1969, Realty Income is a well-established real estate capital provider with a portfolio of more than 15,500 properties across the U.S. and Europe. The firm has previously partnered with Digital Realty on data center investments in Virginia. Cloud Capital, established in 2020 as the investment management affiliate of CloudHQ, describes itself as a specialized investment management firm focused on acquiring, managing, and operating high-quality data centers. The company reports more than $12 billion in data center assets under management, with 30 assets owned and over 330 megawatts in contracted IT load across more than 4.2 million square feet.
"Today's announcement affirms the strength of our business model and its ability to translate across sectors, including digital infrastructure," said Sumit Roy, president and CEO of Realty Income. "We are pleased to advance a scaled digital infrastructure platform while deepening our programmatic relationship with Cloud Capital, which is vertically integrated with CloudHQ, a best-in-class developer and operator. The combination of high-quality data center assets leased to investment-grade tenants, long-duration triple-net leases, and an attractive return profile reflects our disciplined approach to capital allocation and value creation."
Hossein Fateh, founder and CEO of Cloud Capital and CloudHQ, added: "Hyperscale customers need infrastructure delivered at unprecedented scale and pace. Partnering with Realty Income and the Global Investor brings together the capital and the operating expertise to meet that demand and to extend our leadership in the sector."
The joint venture underscores the growing appetite among institutional investors for data center exposure, as hyperscale cloud providers continue to expand capacity to meet surging demand from artificial intelligence and cloud computing workloads. By combining Realty Income’s capital scale with Cloud Capital’s specialized expertise and CloudHQ’s operational capabilities, the partnership is positioned to accelerate development and acquisition activity in one of the fastest-growing segments of digital infrastructure. Moelis & Company LLC served as financial advisor, and Latham & Watkins LLP served as legal counsel to Realty Income. Goldman Sachs & Co. LLC served as financial advisor, and Jones Day served as legal counsel to Cloud Capital.
Source: datacenterdynamics
