Colony Capital took another step toward transforming into a fully digital business by unloading the bulk of its real estate assets to Fortress Investment Group, the firm announced Monday.
The sale of its other equity and debt (OED) portfolio to Fortress will net $535 million of gross proceeds that Colony plans to use for digital investments. Post-closing, 80 percent of the real estate investment trust’s total assets under management will be digital assets. The Boca Raton, Fla.-based Colony currently manages a $46 billion portfolio of real estate assets, including $32 billion in digital real estate investments.
“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,” Marc Ganzi, Colony’s president and CEO, said in a statement. “Fortress is a world-class organization, 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.”
Colony expects the OED portfolio sale to be completed in the fourth quarter. At closing, the REIT will have generated roughly $790 million in total monetizations year-to-date, exceeding its high-end 2021 target of between $400 and $600 million. The transaction also resolves the material ownership of its OED assets in a single transaction, while also enabling Fortress to focus on optimizing their value, according to Colony.
“It’s 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,” Fortress Managing Director Noah Shore said in a statement.
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