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Starwood Capital Launches Platform To Boost Its $8B Venture In Data Centers


Starwood Capital Group has formed Starwood Digital Ventures, a new platform to oversee the investment giant's expansion into data centers.

The company reported that over the last five years, it has made roughly $8B in data center investments totaling 1.5 gigawatts in various stages of development. That foray has made Starwood Capital one of the largest privately held data center developers in the United States and Europe.

Starwood Digital Ventures' further development of data centers will be funded by other investment vehicles that Starwood Capital controls, but the company didn't offer specifics on those entities.

"With the strong demand for data center services in the United States and growing needs to support end uses such as artificial intelligence, we see continued opportunity to invest in this growing sector," Starwood Capital Chairman and CEO Barry Sternlicht said in a statement.

Starwood isn't the only major investor seeking more exposure in data centers. In early January, BlackRock agreed to acquire Global Infrastructure Partners, an infrastructure fund manager with over $100B in assets under management, including CyrusOne, a hyperscale data center platform with more than 50 data centers.

The sector faces headwinds in its ability to meet demand, experts told Bisnow early this year. The most significant drag on development is an increasing scarcity of available power, with utilities in some markets unable to deliver power to development sites.