Up-Close with Carter Validus: Growth and Expansion in Atlanta
by Josh Anderson
ATLANTA, GA — At CapRE’s 2nd Annual Atlanta and Southeast Data Center Summit on August 24, we featured a case study called Up-Close with Carter Validus: Analysis of Growth in the Atlanta Market and Expansion over the Next 12 Months. Moderated by Michael Shaw, Founding Partner and Principal Real Estate Partners, LLC, this panel featured two Carter Validus insiders: Christof Hammerli, Chief Acquisitions Officer & John Regan, Vice President – Data Center Division. Below is the first part of a transcription of that riveting panel discussion.
Brian Klebash, CapRE: Welcome to Up-Close with Carter Validus – we’re going to hear from his Tampa-based investor on how they’re looking at M&A activity in the data center arena. What their strategy is for acquisitions in the Southeast. Why the Southeast is an important play for them. And what they’re doing nationally and potentially internationally. To interview Christof Hammerli and John Regan of Carter Validus, we have Michael Shaw. Michael brings 20 years of experience in various roles in the technology and data center industry. He is a pioneer in the Atlanta colocation market and the original sales leader for Exodus Communications when they opened in the Atlanta market in 2000. Michael has a wide swath of transaction history, selling colocation, professional services, cyber security, most recently the principal data center broker for 55 Marietta, the second largest data center in downtown Atlanta. So we’ve got an expert in the industry to ask great questions of our folks from Carter. Please welcome Michael, John and Christof.
Shaw: Thank you very much. Thank you very much. Well, guys, we stand between everybody here and the mixer … so why don’t we start by having one of you introduce yourselves then.
Regan: I’m John Regan, been with Carter Validus basically since its inception. We’re a major investor in buying mission critical assets. We’ve got a little bit over four billion assets under management, about 160 properties throughout the U.S. We focus on mission critical, like I said, and hospital and surgical centers and long term urgent care facilities. My expertise is in data centers and it comes from a long-standing background at PricewaterhouseCoopers and Digital Equipment Corporation. And I’ve been with Carter now for over six years and I’ve probably looked at about three hundred, three hundred fifty data centers throughout the U.S.
Shaw: And also we have Chrisof Hammerli and why don’t you introduce yourself and then we’ll have a couple questions and see if we can add to the seminar here.
Hammerli: Perfect. So John, a brief background on Carter, he and I worked together on the acquisition side. We actually started within about a week from each other, six and a half years ago and when the company had no assets and no money at that point and since then we’ve grown but as John’s outlined, my background’s a little different from John’s. I was actually switched a day at Equinix before starting Carter Validus. John’s a lot more technical than I am. I’m more focused on the finance and market side. Together we make a great team, you know, sourcing assets for Carter Validus.
Shaw: Yeah, great. So why don’t we start out. There’s been a lot of talk on the M&A activity throughout the summit here. There’s been some great information and there’s some exciting activity coming to Atlanta. Obviously Carter Validus has been active in Atlanta. So from your standpoint, as being you know active in commercial market, as you mentioned healthcare, you know, the office and data center, some people have talked about, how there’s a slowdown in commercial real estate on the traditional of side commercial real estate. How do you guys see the data center side, specifically as it relates to the other aspects. Do you find yourself in a better position now with the activity that we’re seeing?
Regan: I can say that, you know, if I look back six and a half years ago, data centers weren’t necessarily in a separate asset class overall. It was very difficult to get financing. There weren’t a whole lot of lenders in the space. And you know, if I fast forward to where we’re at today, it’s significantly different. The environment is, has so drastically changed, it’s actually pretty incredible. And now we’re at a point where there’s significant amounts of capital that are kind of — that were on the sidelines for a long period of time, thinking about investing in the data center space and all of a sudden, you know, we’re seeing new entrants into the data center space coming in. And it’s net lease buyers. And we see continued opportunity in the space, as modernization of assets takes a stronger foothold in the market overall.
Continue the Atlanta data center conversation. Stay tuned to CapRE’s Insider Reports for further snippets of this up-close panel.