The Real Deal National

Colony Capital’s Thomas Barrack will exit as CEO as part of deal to buy digital infrastructure firm

Barrack, who founded the LA-based investment firm, returned to the helm in November amid the company’s falling stock price
By Dennis Lynch | July 25, 2019 05:48PM

Thomas J. Barrack is stepping down as CEO of Colony Capital in favor of Marc Ganzi

Thomas J. Barrack is stepping down as CEO of Colony Capital in favor of Marc Ganzi

Nine months after returning as CEO of Colony Capital, founder Thomas Barrack has given himself a term limit: 2021.

Barrack will step down as the investment firm’s chief executive, returning to his post as executive chairman. The move was announced Thursday, as part of a $325 million deal to acquire digital infrastructure investment firm Digital Bridge Holdings.

As of Thursday afternoon, Colony’s stock price was at $5.41. It was at $6.11 on Nov. 8, when Barrack ousted CEO Richard Saltzman amid the company’s falling stock price following its merger with NorthStar Asset Management.

Digital Bridge Chairman Marc Ganzi will succeed Barrack. The transition will be made over the next 18 to 24 months, according to a statement detailing the deal. Florida-based Digital Bridge acquires and manages cell phone towers, optic fiber networks, and data centers, among other assets.

In the statement about the acquisition, Barrack said: “real estate in its current format with long-dated contractual revenue streams from traditional tenants will have to change and adapt or face substantial obsolescence.” He added, “location, location, location is giving way to connect, connect, connect.”

The two firms aren’t strangers, having partnered on a $4 billion digital infrastructure fund, Digital Colony Partners, that closed in May.

Last month, Colony secured a $1.7 billion refinancing on more than 150 healthcare properties across the country. In March, it announced it was buying $1.2-billion portfolio of industrial properties spread across the country.

Barrack founded Colony Capital in Los Angeles in 1991. He handed over the reins to Saltzman in 2014. Saltzman oversaw Colony’s $19.9 billion merger with NorthStar in 2016.
Shares dropped steadily over the following years as it became clear that Colony had overvalued NorthStar, prompting Barrack’s return as CEO in November. In 2017 alone, the company recorded a net loss of more than $333 million.

The acquisition of Digital Bridge, which manages $20 billion worth of digital infrastructure across North America and Latin America, brings Colony’s total assets under management up to $60 billion, according to a press release.

Ganzi co-founded Digital Bridge in 2013 after selling his company, Global Tower Partners, to American Tower Corporation for $4.8 billion.