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Colony Capital offloads $2.7bn worth of non-digital assets

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Marc Ganzi’s Colony Capital is making one of its biggest moves ever out of non-digital investments, so that it can focus on digital infrastructure.

The group is divesting US$2.7 billion worth of combined assets under management to New York-based Fortress Investment, for a payment of $535 million.

“This transaction is a watershed moment for us, a big step towards our finish-the-mission goal as we rotate to a fully-digital business,” said Marc Ganzi (pictured), president and CEO of Colony Capital.

“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.”

The assets Colony Capital is transferring includes offices, hotels and land in France, Ireland, Spain, the UK and the US. Industries covered include real estate, securities and energy.

The deal means Colony has speeded up its move out of digital. It expected to dispose of assets worth $400-600 million this year, but once the Fortress transaction is complete, “the company will have generated approximately $790 million in total monetisations year-to-date”, said Colony.

Fortress said it will become general partner and manager to a series of Colony’s funds, co-investment vehicles and other non-digital real estate positions. Fortress will take on a portfolio of approximately 40 positions encompassing over 100 properties in Europe and the US.

Fortress managing director Noah Shore said: “This business and its underlying assets fit perfectly 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.”

Colony said it would save $18 million in costs and said the deal will allow an enhanced focus on digital. After the deal is complete — expected in the fourth quarter — 80% of Colony’s assets will be digital, the investor said.

Ganzi said: “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 [real estate investment trust] in the world.”

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