(Bloomberg) — American Tower Corp. is in talks to buy data-center real estate investment trust CoreSite Realty Corp., according to people familiar with the matter.
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The companies could announce an all-cash deal valuing CoreSite at roughly $10 billion as soon as this week, said the people, who asked to not be identified because the matter isn’t public. As with all deals that haven’t been finalized, it’s possible talks could fall apart at the last minute.
CoreSite rose 2.3% to close at $166.59 in New York trading Friday, giving the company a market value of about $8.4 billion. American Tower was little changed, closing at $272.10, for a market value of about $124 billion.
A Representative for American Tower, based in Boston, declined to comment. Representatives for Denver-based CoreSite didn’t immediately respond to requests for comment.
The potential deal comes amid steady consolidation among REITs that manage data centers, which provide critical infrastructure for companies big in cloud computing such as Amazon.com Inc., Salesforce.com Inc. and Alphabet Inc.
Some data center REITs been pairing up to add scale — and pricing power — to better serve their largest and most critical tenants. They also see more growth on the horizon as demand for data infrastructure keeps rising.
Real-estate investing giant Blackstone Inc. agreed to take data-center operator QTS Realty Trust Inc. private in a $6.7 billion deal in June, in part to gain exposure to a hot sector.
CoreSite operates 24 data centers in major urban hubs including Boston, Chicago, New York, Miami and Los Angeles, according to its website. Unlike most REITs that earn almost all of their income from leasing, CoreSite also makes money from power and interconnection services it supplies to tenants.
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