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Strategy

digital infrastructure strategy
 
  1. Traditional Real Estate: asset classes are priced to precision, growth is questionable, interest rates are at all-time lows, public equity markets are at all-time highs, and every category of real estate is incurring massive CapEx to remain relevant
    • Physical, financial and functional obsolescence of traditional real estate (e.g., retail and low-density office space)
    • 5-year organic cash flow growth of traditional verticals: lodging is flat at 0.7% growth; healthcare is growing at 2% p.a.; retail is down 50 bps – overall picture demonstrates that traditional real estate assets are not growing
    • Long-term contractual revenues from creditworthy counterparts, is much better in the “digital” frontier than the “legacy” space
  1. Target high growth digital infrastructure investments with secular tailwinds in the technology-led real estate sector. Focus on assets that have long-term contracts, high-concentration exposure to investment-grade counterparty risk, and most importantly, cash flows that are growing with customers that are growing
    • Doing business with the big 5 “FAANGs”, the investors of another $500+ billion of capital over the next 5 years, on long-term contracts, backed by real estate which has tremendous barriers to entry
    • Organic cash flow growth is occurring in the main verticals of digital real estate: i) towers have grown at 7% p.a., ii) data centers have grown at 10% p.a. and iii) fiber has grown at 3% p.a.
  1. Driven by powerful themes such as 5G, IoT, artificial intelligence, mobile video usage and cloud services, publicly-traded digital real estate equities have significantly outperformed traditional real estate and the broader equity indices over the past decade and are positioned for continued, strong secular growth for at least the next 15 to 20 years
  1. Urban Cascade will specifically, target firms with assets including towers, data centers, fiber networks and small cells (collectively, “Digital Infrastructure”), primarily located in North America and Europe:
    • Growth in data, mobile and digital content is driving demand for and reliance on physical digital infrastructure assets by individuals in their everyday lives, and by the entirety of the global communications networks