Last week Reuters reported that Verizon Communications was exploring the sale of a data center portfolio that could trade for more than $2.5 billion. The company reportedly has tapped Citigroup to advise on the sale. Verizon itself wasn't commenting to confirm or deny the report, not to Reuters and not GlobeSt.com, when we followed up with inquiries.
Given that, it could be easy to dismiss the news especially as similar reports surfaced last year followed by…well, nothing.
But this time may well be different. Citigroup is apparently on the scene now. Also, that "expected" price of $2.5 billion cited in the article has all the earmarks of a company floating a prospective deal in the media to see what kind of reception it would get in the market.
Unfortunately for Verizon, it is not going to market with the best hand -- at least the hand as described in Reuters.
For starters, Verizon has many more data center assets than 48, Rick Drescher, managing director of Technical Services at Savills Studley, tells GlobeSt.com. Which ones it plans to include in the portfolio is an open question, he says. "Data centers can become obsolete very quickly. I would guess that most of the assets Verizon is planning to market are not the kind of assets that a company like, say, Digital Realty would want..."Why Verizon’s 48 Data Center Portfolio Will Probably Be Broken Up
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