JLL has launched a data center valuation group and tapped one of its own to lead it, a move that follows several blockbuster data center deals in the second half of last year.
The Chicago-based global brokerage's valuation advisory services business is expected to announce early this week that it promoted Stuart Miller, senior vice president, to lead the new data center practice as part of its alternative real estate assets group. Miller is based in JLL's Dallas office.
JLL said it created the new practice "to meet rising demand for data centers both by investors and users." Miller is leading a team responsible for valuations of data center portfolios, financial reporting and purchase price allocations.
Tony Lenamon, who heads JLL's valuation advisory services business in the Americas, said the new data center practice would enable the firm to better serve clients that own or are looking to own the mission-critical facilities that are proving popular with investors.
“Alternative real estate asset classes like data centers have been the darlings of commercial real estate for the last few years, propelling both user and investor demand for data centers to new heights in 2021,” Lenamon said in a statement.
Last year marked a milestone for data center sales thanks to several big acquisitions. In fact, M&A activity reached a new high last year after setting a record in 2020.
In 2021, more than $47 billion of mergers and acquisitions occurred in the data center industry, according to JLL's 2021 Year-End Data Center Outlook report. That represented a 36.5% jump in deals compared with the $34.5 billion that occurred in 2020, according to the JLL report.
Some of the major deals that closed in the second half of last year included American Tower's $10.1 billion purchase of CoreSite, Blackstone's $10 billion acquisition of QTS Realty Trust and Mapletree's purchase of a portfolio of 29 data centers from Silas Realty Trust for $1.3 billion.
This year got off to a fast start as well, with KKR and Global Infrastructure Partners closing on a $15 billion all-cash acquisition of CyrusOne, a real estate investment trust that specializes in the construction and operation of more than 50 data centers across the globe.
Valuation professionals typically play an important role in figuring out the value of individual data centers included in large transactions such as the acquisition of data center companies and portfolios.
As Miller takes over as JLL Valuation Advisory's data center practice lead, he comes with five years of experience in valuating and pricing data centers. He's worked in assignments from multiple Fortune 100 companies, investors, national banks and owner-operators.
Miller's team is off to a busy start and is working with more than 30 national property portfolios for international REITs, large data center providers and other clients.
In a LinkedIn post, Miller said the data center team is growing and looking to hire members.