Realty Income Forms $1.4B Joint Venture With Cloud Capital and Global Institutional Investor for Northern Virginia Data Centers
SAN DIEGO, June 30, 2026 — Realty Income Corp (NYSE: O) announced a programmatic joint venture with Cloud Capital and a global institutional investor to acquire and develop a portfolio of hyperscale data centers in Northern Virginia, with seed assets valued at over $6 billion. Realty Income expects to invest up to $1.4 billion for a 45% equity stake in the three-asset portfolio, with initial funding of approximately $700 million targeted between the second and third quarters of 2026.
The joint venture will acquire one stabilized hyperscale data center asset in the third quarter of 2026 and has committed to acquire two additional assets currently under development at a future date, subject to certain conditions. All three properties are located in Northern Virginia's "data center alley."
Joint Venture Structure and Partners
The joint venture brings together three parties: Realty Income Corp as the primary equity investor, Cloud Capital as a minority investor and affiliated manager, and an unnamed global institutional investor. CloudHQ, a private global data center company affiliated with Cloud Capital, will provide property management and development management services to the portfolio.
Hossein Fateh, Founder and Chief Executive Officer of Cloud Capital and CloudHQ, said in a statement: "Hyperscale customers need infrastructure delivered at unprecedented scale and pace. Partnering with Realty Income and the Global Investor brings together the capital and the operating expertise to meet that demand and to extend our leadership in the sector."
The programmatic structure of the joint venture is designed to allow Realty Income to pursue future qualifying data center investments and acquisitions in both the United States and Europe beyond the initial three-asset seed portfolio.
Sumit Roy, President and Chief Executive Officer of Realty Income, said: "Today's announcement affirms the strength of our business model and its ability to translate across sectors, including digital infrastructure. We are pleased to advance a scaled digital infrastructure platform while deepening our programmatic relationship with Cloud Capital, which is vertically integrated with CloudHQ, a best-in-class developer and operator. The combination of high-quality data center assets leased to investment-grade tenants, long-duration triple-net leases, and an attractive return profile reflects our disciplined approach to capital allocation and value creation."
Portfolio Details and Lease Structure
The three-asset portfolio is 100% leased or pre-leased to investment-grade hyperscale tenants. The stabilized asset, to be acquired in Q3 2026, is fully leased to an investment-grade hyperscale tenant under a long-term triple-net lease. The two development assets are similarly pre-leased to investment-grade hyperscale tenants. Realty Income did not disclose the identities of the tenants, street addresses, square footage, or megawatt capacity for any of the three properties.
Lease terms across the portfolio range from 15 to 20 years under triple-net structures, with embedded annual rent escalators described as customary for hyperscale data center product. Realty Income said the transaction is expected to generate a cash-on-cash yield consistent with its existing return targets, without specifying a figure.
Strategic Context: Realty Income's Digital Infrastructure Expansion
The Cloud Capital joint venture represents Realty Income's continued expansion into digital infrastructure. As of March 31, 2026, Realty Income reported a portfolio of over 15,500 properties across all 50 U.S. states, the United Kingdom, and eight other European countries. The company, known as "The Monthly Dividend Company," has declared 672 consecutive monthly dividends and is a member of the S&P 500 Dividend Aristocrats index.
The joint venture's programmatic structure — allowing for future acquisitions and developments in the U.S. and Europe — positions Realty Income to deploy capital incrementally as development milestones are reached, rather than committing the full $1.4 billion upfront. Realty Income framed the portfolio as aligned with "mega-trends of cloud computing and artificial intelligence," citing the long-term strategic importance of hyperscale infrastructure to both sectors. Cloud Capital, founded in 2020, has assembled a portfolio of 30 data center assets worldwide valued at over $12 billion, according to the firm.
Advisors
Moelis & Company LLC served as financial advisor and Latham & Watkins LLP served as legal counsel to Realty Income. Goldman Sachs & Co. LLC served as financial advisor and Jones Day served as legal counsel to Cloud Capital.