Data Center REITs CyrusOne and CoreSite will both be acquired in separate deals with a combined value of over $25B.

CyrusOne has agreed to a $15B deal that will see the data center firm taken private by investment firm KKR and Global Infrastructure Partners, company officials confirmed this morning. Earlier, Bloomberg reported that CoreSite is on the verge of an acquisition by American Tower in a deal valued at over $10B.

Industry insiders say these long-rumored acquisitions — which come less than a year after Blackstone’s $10B deal to take QTS Realty Trust private — reflect a changing landscape in which publicly traded REITS have strong incentives to consolidate or flee public markets to better weather expected headwinds and to scale quickly enough to meet the seemingly insatiable demand for rack space.

“It’s changing for sure,” said John Dobo, Landmark Dividend’s senior vice president of digital infrastructure, speaking at Bisnow’s DICE East event on Thursday.  “I think all the major REIT operators are looking at potentially selling.”

Contributing to this trend: the willingness of private equity funds and other investors eager to get into the digital infrastructure space to pay well over share price. KKR and GIP are reportedly paying $90.50 per share for Dallas-based CyrusOne, 5.9 % above the company’s last closing price. The deal is expected to close in the last quarter of 2022.

American Tower’s acquisition of CoreSite, expected to close by January, values the data center provider at $170 per share, a 2% premium on the price at Friday close. American Tower is also structured as a REIT, although its portfolio entails a range of telecommunications-related properties and infrastructure. In purchasing Denver-based CoreSite, American Tower adds a portfolio of 24 U.S. data centers.

“The combined company will be ideally positioned to address the growing need for convergence between mobile network providers, cloud service providers, and other digital platforms as 5G deployments emerge and evolve,” CoreSite CEO Paul Szurek said in a statement. “In addition, we expect the enhanced scale and further geographic reach to provide a platform for the combined company to accelerate its growth trajectory and expand into additional US metro areas, as well as internationally, leveraging American Tower’s extensive presence across the globe.”

As Bisnow reported last week, experts point to a number of market factors and potential headwinds that have incentivized public REITs — particularly in the data center space — to seek buyers.

One of the most significant looming likelihoods is the Federal Reserve raising interest rates, which have an outsized impact on the stock price of companies with a REIT structure, industry leaders told Bisnow’s DICE East audience. Exiting public markets would also make REITs more competitive for development deals — particularly the large development contracts with hyperscale cloud providers that are increasingly the backbone of the data center industry. At present, analysts tell Bisnow that REITs are often held back by the debt aversion of stock market investors, and that has put investment trusts at a competitive disadvantage in the superheated, and somewhat speculative, hyperscale development landscape.

Experts say consolidation among REITs — such as American Tower’s purchase of CoreSite — can also help address these concerns, with instant scale and increased pricing and purchasing power to address likely cost increases.