We believe leading technology companies are likely eager to meet consumers' need for expanded data and compute power but may be encountering a datacenter market with limited supply. They are increasingly showing preference to develop hyperscale data centers which may offer scalability and are engineered for large-scale workloads with streamlined network connectivity and minimized latency.1
The hyperscale model can offer companies control over a datacenter when compared to the co-location model. While colocation comes with a lower financial outlay and the potential for better mobility due to short duration leases, the hyperscale model aims to improve efficiency by way of tenant-specific customization driving immense tenant demand towards this optimized structure.
Given the scale and significance of hyperscale projects, the opportunity to structure net leased contracts may present a compelling yield premium over a similar duration bond of the same company, with the addition of attractive asset collateral.
Data centers present an opportunity for a natural extension of Blue Owl Real Estate’s investment philosophy, leveraging 15+ years of experience in net leases. In response to the exponential demand growth in the sector, Blue Owl is bringing our innovative structuring and transactional expertise to help meet the needs of a hyperscale driven build-to-suit opportunity. Blue Owl Real Estate is not taking on any risks related to construction, power delivery, fiber connectivity, or operating and capital expenditures via our triple net lease structure.
Our platform is well positioned to provide capital to take advantage of the demand surge in data centers, structured in a way that is consistent with the investment characteristics we have historically pursued:
Past performance is not a guarantee of future results. This is for illustrative and informational purposes only. All investments involve risk of loss, including loss of principal invested. There can be no assurance that historical trends will continue. There can be no guarantee that the objectives described herein will be achieved.
Endnote
Important information
Past performance is not a guarantee of future results.
The material presented is proprietary information regarding Blue Owl Capital Inc. (“Blue Owl”), its affiliates and investment program, funds sponsored by Blue Owl, including the Blue Owl Credit, GP Strategic Capital Funds and the Real Estate Funds (collectively the “Blue Owl Funds”) as well as investment held by the Blue Owl Funds.
The views expressed and, except as otherwise indicated, the information provided are as of the report date and are subject to change, update, revision, verification, and amendment, materially or otherwise, without notice, as market or other conditions change. Since these conditions can change frequently, there can be no assurance that the trends described herein will continue or that any forecasts are accurate. In addition, certain of the statements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on the current views and assumptions of Blue Owl and involve known and unknown risks and uncertainties (including those discussed below) that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements. These statements may be forward-looking by reason of context or identified by words such as “may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue” and other similar expressions. Neither Blue Owl, its affiliates, nor any of Blue Owl’s or its affiliates' respective advisers, members, directors, officers, partners, agents, representatives or employees or any other person (collectively the “Blue Owl Entities”) is under any obligation to update or keep current the information contained in this document.
All investments are subject to risk, including the loss of the principal amount invested. These risks may include limited operating history, uncertain distributions, inconsistent valuation of the portfolio, changing interest rates, leveraging of assets, reliance on the investment advisor, potential conflicts of interest, payment of substantial fees to the investment advisor and the dealer manager, potential illiquidity, and liquidation at more or less than the original amount invested. Diversification will not guarantee profitability or protection against loss. Performance may be volatile, and the NAV may fluctuate.
This presentation is for informational purposes only and is not an offer or a solicitation to sell or subscribe for any fund and does not constitute investment, legal, regulatory, business, tax, financial, accounting, or other advice or a recommendation regarding any securities of Blue Owl, of any fund or vehicle managed by Blue Owl, or of any other issuer of securities. Only a definitive offering document (i.e.: Prospectus or Private Placement Memorandum) can make such an offer.
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