DigitalBridge Group, Inc. (DBRG) Earnings Call Transcript & Summary

Good afternoon. Welcome to the 4:15 p.m. session at Citi's 2022 Global Property CEO Conference. For those of you I haven't met yet, I'm Mike Rollins, and I cover communications infrastructure as well as communication services for Citi Research. And it's a real pleasure to welcome back to the conference, Digital Bridge and CEO, Marc Ganzi. This session is for city clients only. If media or other individuals are on the line, please disconnect now. Disclosures are available on the webcast and at the AV desk. For those joining us here today in person, if you'd like to ask a question during our session, please step up to one of the mics we've located in the center aisle of the room. And if you're joining us remotely, simply type them into the question box on the screen, they're going to come directly to us, and we'll do our best to get them asked during our time with Marc. Marc, welcome back. Great to see you.

Yes. Nice to see you, Michael. Thank you. It's good to be back here in person.

So I'll turn it over to you to introduce the company. There have been some changes since 2 years ago when we were last together here. And so just maybe you want to give a brief update in terms of the evolution of Digital Bridge.

What a difference 2 years makes? I think that's the appropriate introduction. We've had an incredible run over the last 2 years, transforming a diversified REIT into a pure digital REIT. To get there, Mike, we outlined to you 2 years ago, 4 things that we had to do. One was we had to rotate out of some legacy real estate assets. 2, we had to delever our balance sheet. 3, we had to get our cost structure in check. And then 4, we had to give investors a credible path for growth. I think 2 years now in the [indiscernible], we can say we've successfully completed all 4 objectives. How do we do? We rotated about $78 billion of assets under management in a relatively short and efficient 24 months. We took our cost structure from $300 million plus a year in run rate G&A down to $113 million in G&A, bringing responsible principles to how you run a business. And then the third thing we did is we took leverage. I can't even tell you what the leverage multiple was, but it was too much, and we brought that leverage multiple inside of 7x, which we feel like for how fast we're growing now is an appropriate level of leverage for a digital REIT. And then lastly, we had to show a credible path to growth. And we've done, I think, a really good job of doing that. In simplifying the business and digital operating and digital IM, Digital operating had a relatively good year last year, growing at about 6% to 8%. And then, of course, digital IM, which is our asset management business grew about 25% to 30%, showing really strong growth in terms of our ability to raise capital, and most importantly, put that capital to work in good ideas. And last year was no exception. We deployed about $20 billion of AUM last year in new ideas. And this year is shaping up more of the same. I think we've got a great opportunity to now in a cleaner format to deploy capital. We've got, we believe, about $4 billion to $4.5 billion of purchasing power. We have over about [ $1.5 billion ] of liquidity sitting on our balance sheet or cash equivalents post the monetization of the legacy assets that we sold. So we sit here today a cleaner, easier to digest story. And dare I say, one of those rare creatures, digital REIT.

Great. So our first question that we're asking the companies who are joining us at this conference is what are the top 3 reasons an investor should buy your stock instead of any other listed property company.

Well, first and foremost, we're really the only digital REIT, Michael, that's investing across the converged ecosystem. If you paid close attention to our last quarterly call and you took a look at the map of where we're building and buying assets, we're not beholden to one strict asset class in the digital REIT ecosystem. And what I mean by that is we're investing in 5 different geographies across 4 different verticals. -- mobile towers, mobile infrastructure supporting 5G, building large hyperscale campuses that support cloud computing, building the required necessary fiber-optic networks that binds and connects all this together. And then last but not least, building mission-critical small cell and edge infrastructure, which we think is one of the great thematics heading into this next decade is pushing network capacity and low latency solutions out into secondary tertiary in peripheral parts of the network, which we think is a great place to be. So all told, $6.6 billion of new greenfield construction this year for us, building and operating assets in Asia, Europe, Latin America, North America, and most recently, our announcement in Johannesburg, where we're building a 100-megawatt campus for hyperscale compute.

And you mentioned earlier the $4.5 billion of purchasing power, is that strictly on balance sheet purchasing power separate from investment management? Is that fore leverage, after leverage?

So that's after leverage, and that's on balance sheet. So one of the keys to our growth trajectory has been transforming our balance sheet assets, moving away from hotels and medical properties and into edge compute sites with DataBank and hyperscale data centers with Vantage. We think those are 2 of the best defensible places to be. You want to be exposed to edge computing, and you want to be exposed to cloud. And the best ways to do that are to play and have a responsible and significant position in DataBank and Advantage YieldCo. I think as we think about what's around the corner, the big question we've gotten this morning is how we intend to deploy the remainder of the balance sheet. I think that was on display last quarter. We just recently closed on a series of data centers in Houston from CyrusOne, increasing our footprint at DataBank, buying 4 really good properties effectively at about 18x. We've had a significant amount of new leasing activity happening in Houston with some of the web scalers. So through those leasing activities and new development, we can drive that multiple all the way down to 14x to 13x. And when we look at where most of the public to private multiples of traded, Michael, we say that's an accretive trade for our shareholders. You're looking at other comparables that have been trading out at 28x to 30x, we felt like the acquisition from Cyrus was a smart tuck-in. So you'll see us do that. I think there's a lot of activity in fiber right now. And I think there's a way to play in that asset class that's REIT-eligible that makes sense. There, we're looking to play in the what we call the wholesale space or long-haul transport. A lot of our customers are looking to build new low latency routes where they need to ultimately bring that traffic from one availability zone to another availability zone, and the best way to do that is through long-haul transport. So there are some interesting assets out there and there are interesting opportunities to partner up with investment-grade or strong web-scale logos to either do a sale-leaseback or create a JV around their fiber infrastructure. And so we think that's an interesting idea. We continue to also think that investing in the mobile infrastructure space, whether there is towers or land or easements, those are also good uses of capital. The guiding principle for the use of the balance sheet is really sort of 4 core principles. One, we want to have long-duration contracts. We think if we're going to put our balance sheet to work, we need to be rewarded with counterparties that are going to enter into long-term relationships with us. Two, we want to be exposed to 60% investment-grade versus noninvestment grade, so making sure that those counterparties that do enter into leases with us, we're getting the right investment grade exposure. We want to have some form of an escalator in those leases, typically between 2% to 3%. And then last but not least, there needs to be some evidence that we can grow into that asset base through lease-up, whether even if it's a small amount of lease up, like we did at Vantage YieldCo where we had most of those buildings were about 80% occupied. We can move occupancy from 80% to 90% or in DataBank, where we're actually building out de Novo Edge Compute sites who we are tethering from an existing data center in an urban core and tethering out to the suburbs. So we like to see that there's some evidence of growth in both Vantage YieldCo and DataBank have absolutely fulfilled those 4 quadrants of how we deploy the balance sheet.

On the fourth-quarter earnings call, you and the team discussed that Digital Bridge is targeting AUM of $100 billion -- and that's over the next 5 years, I believe, was mentioned. So to invest this quantum of capital, does Digital Bridge have to expand the scope of what you invest in or what you consider to be communications infrastructure.

Well, I think the definition and the swim lanes of digital infrastructure, Michael, are expanding. I think if we wound the clock back 10 years ago when you and I first were discussing digital infrastructure when digital REITs were first born, the narrow -- the swim lanes were pretty limited. It was towers and maybe eventually data centers. Today, we've evolved to an asset class where you look at, for example, ExteNet will become a REIT shortly, which will be the first small cell REIT. You've got Uniti, which is a fiber REIT. And then, of course, you've got the cell tower and data center REITs. The expandable universe, I think, continues to get bigger. I think you're now seeing in data centers that investors do understand the difference between sort of what I would call enterprise colo against edge compute against hyperscale. And so we now have sub-verticals inside of data centers. We've talked about small cells. We talk about private enterprise, 5G networks, like what we're doing with Boingo, the transformation of that business from a WiFi operator into an infrastructure player. That's a pretty interesting case study as well. So we believe that the investable universe is getting bigger, not smaller. Our TAM has been growing pretty consistently on average by about 5% to 6% per year. So total CapEx spend on a global basis back in 2019 was about $380 billion of CapEx. Last year, in 2020, that moved up to about -- just shy of $390 billion of CapEx. This year, the numbers aren't official on '21 yet, but it probably crossed about $400 billion, and we're projecting about $412 million to $415 billion of de novo CapEx focused on data centers, small cells towers and fiber. So that's a pretty big amount of new CapEx that's going into the ground. And if you look over a 4-year period, that's about my arithmetic about $1.5 trillion of CapEx that's been spent in digital infrastructure. That's a good place to be hanging out. I think we think that market is growing, and we think investor appetite is increasing. And whilst maybe we've lost a couple of the public logos, I don't think investor sentiment has soured on the space. I think investor sentiment is growing as large LPs around the globe are a bit under-allocated to digital infrastructure.

So it was interesting. I think on the earnings call, you might have been alluding to this with some of the long-haul routes that you were describing, the low latency routes, but you were talking about creative ways to expand into different product areas that maybe you haven't done before. Are there 3 or more ideas that investors should be keeping in mind of just emerging areas that you're particularly excited about?

Well, I think I continue to be excited by edge computing. I think the stuff that we've done at DataBank and Atlas Edge are -- is different. It's innovative. AtlasEdge, in particular, was a customer-driven idea between ourselves and Liberty Global. It was really to take their legacy data center infrastructure and central offices and reimagine them and reshape them into edge compute sites. And we're doing that, and that's proven to be successful. And what's happening there is that use cases and applications are popping up for those data centers that didn't exist 4 or 5 years ago. So we're talking to customers that we didn't really think we're going to be entirely relevant. But when you're talking to different types of logos like VMware or Federal Express or even the usual cloud players, putting this infrastructure on the periphery of the network versus the core is what a lot of big companies need to do to. To really fulfill the promise of 5G and build low latency solutions, you have to have infrastructure, not only in the urban core, but you have to start building that infrastructure further and further out for it to perform the way you want it to perform. And so some of the early returns so far in Atlas Edge around this exact idea. So I get pretty excited about that. I am excited about what we've done with Boingo. That's a pretty interesting turnaround. It was a business that was primarily focused on WiFi. But with the advent from moving to a new WiFi standard, which is WiFi 6 and with the innovation of enterprise indoor CBRS networks, we've been able to reimagine that business and turn it into an infrastructure business. So a lot of what Boingo builds today is they took those old Boingo WiFi hotspots that all of you probably knew 15 years ago at airports, and we've now weaponized that network for enterprise. And so using CBRS frequencies and spectrum and using that existing infrastructure, we're able to deploy technology into a convention center, an airport or into, for example, the New York Metro Transit Authority, which we're building out right now. And we can host not only the 3 mobile carriers on that infrastructure, but we're also hosting the enterprise, which in that case is, for example, at LaGuardia Airport, we're hosting the port authority of New York, but we're also on that network. We're able to host all the airlines. So we can actually help them improve their workflows and their processes by bringing them technology, Michael, where they can improve all of their wireless technology at the gate, baggage claim, and create efficiencies. We can then sell those services into the retail vendors inside the airport. And you can also have public safety run on that network because it's incredibly secure. So there's many dimensions. You just have to reimagine what infrastructure looks like, and that's one of the great examples of what we've done at Boingo is create enterprise 5G grade networks that previously had not been available, but through the advent of CBRS radio technology, we can do that. So that's pretty exciting. Then the last thing of what's exciting. Let me go with the geography. I like what we're doing in Asia. Asia has been a great -- for us, it's been fantastic. In some of the verticals that are behind and in some of the verticals that are ahead. So for hyperscale compute, they're behind, in terms of building large-scale hyperscale campuses. No one has really put together a large private tower company. We're doing that in Southeast Asia. We've got over 16,000 towers now at EdgePoint across 3 different geographies. We're going to keep growing those geographies. So we're topically excited about what's happening in Asia. So those are my top 3.

And do you have any meaningful exposure to Russia or Ukraine that investors should be mindful of?

Zero. We don't invest in markets like that, never have.

This may be a complicated question because of all the different portfolio companies that Digital Bridge owns and works with. But what's the impact of inflation and rising energy costs to the portfolio of assets in your business models?

So let's start with energy cost. That's an easy one. Our energy costs are passed through to our customers. So we don't bear any of those direct costs. So there, we've been somewhat insulated and protected. I would say on inflation, where are we feeling it the most, I would say, we're feeling it the most in labor. Most people are surprised when we say that. There are some warranty filling supply chain constraints and so on so Well, most of our CEOs have been in the sector for 20, 30 years. We've got great leaders that run our companies. and they tend to be category leaders in what they do. So a lot of the purchasing for generators and componentry related to hyperscale, we did a lot of that purchasing prepandemic. And we bought a lot of capacity, particularly with cooling vendors and with generator vendors, and those are sort of the 2 key vendors you need. So for me, inflation is about making sure we protect our talent. That's probably been the hardest thing to do, particularly in the last 12 months, not only at the parent company, which is DigitalBridge, but down at our 23 different portfolio companies, that's a challenge as well. The labor market has never been more competitive for what we do, highly specialized, very difficult. So to suggest that maybe inflation for wages is 9%, we might even be conservative there. I would say other impacts of inflation that are probably not as apparent is just land cost, right? A lot of what we do is we acquired land and we build on that land. In certain pockets, land costs have gone up 30%, 40%, 50%. And in certain pockets, land has decreased in value 15%, 20%. So land cost is something that we're keeping an eye on. But by and large, we're also getting rewarded for our efforts. During the pandemic, a lot of our customers were sending employees home really couldn't function at the level that they would like. So this whole notion of self-perform was not existent because they weren't back in the office. They couldn't perform. It was an inability to perform. And so that opened a window for us, where we could go out and perform. We never stopped in the pandemic. We kept working and that created opportunity, which we took advantage of, and we'd continue to build. During the pandemic, as we saw supply dry up in some of the verticals that we operate in, it offered us a chance to revisit price in terms on our leases. And in turn, we've been able to adjust for inflation by getting higher lease rates in certain markets and in certain industries like Hyperscale data centers like Edge Computing, like towers, small cells. What we have found is our customers have never needed us more than today. So it's been -- net-net, it's been a positive for us.

So we talked a little bit about the financial capacity that you have on balance sheet as well as your targets for the investment management business. And so as you look at over a 3- to 5-year view, how should investors think about the mix of revenue and profits that comes from each side?

Ideally, we'd like to be in a perfect world with sort of 50-50. I mean if that's possible. I think we have a -- we have -- on our digital operating side, we're sort of on a run-rate basis at about a little under $80 million. We're targeting to get that to $175 million to $225 million of EBITDA in the next 2 years. And we have pretty good line of sight on how we get there. On digital IM, every time I think we've got a number that we feel comfortable with, we -- thankfully, we exceed it, and that's been a pleasant surprise for us. So we ended last year at about a little over $18 billion of FEM. So that kind of trajects out to about over $200 million of fee revenue. We're pretty confident that if you look at our sort of AUM guidance over the next 5 years, which is sort of doubling AUM, one could extrapolate that we'll double our FEM, which would be a safe projection. And then this year, we've guided The Street to another -- adding another $3 billion to $4 billion of FEM getting to $22 billion. And the cadence, we seem to be on is kind of a $4 billion to $5 billion cadence per year. So if we're capable of raising the capital that we've been able to raise over the last 3 to 4 years, -- if the history is sort of a predictor of the future, it's not totally crazy to think of a world where we're circa $40 billion to $50 billion of FEM inside of 4 to 5 years. I think it's pretty safe to say we will get there. So we've issued another beat and raise. That was, I think, our second beaten raise in 2 quarters based on our conviction level around our ability to form capital but not only form Capital Michael, but put the capital to work. And we've also disclosed in the last quarter that we're really excited about the launch of 2 new strategies, one in credit, having a digital infrastructure credit team and a credit product that nobody else has, we think is unique and differentiated. So we've closed 7 loans in the last quarter, got a pipeline of another 29 loans in process, we have ability to put another $1 billion, $1.5 billion of capital to work. So we're excited about that. We're seeing good yields on those loans. It's not typical term loan A market, as most would know. Our unitranche loans, is more focused on second lien and that skill capital that companies need to continue to grow in this environment, where we think equity is really expensive. So we're a partner to a company that has $20 million to $100 million of EBITDA, doesn't have the scale to get out and go issue in the ABS or CMBS market and perhaps doesn't have the gravitas with the rating agencies. So we're going to help companies get there. And so I think by providing that skill capital, and having management teams where I've been there before, I've sat in that chair where that CEO is and they need that extra $200 million to $300 million to go build 2,000 cell towers and do fiber to the tower. They need to go build 3 new hyperscale campuses. We want to be the skill capital partner of choice. Second new strategy is our core strategy, which we're really excited about. Here, it's just really pairing capital with the right assets, assets that have reached a maturity point where there's good yield, strong cash flows, strong management, but certainly doesn't work for private equity and doesn't work for infrastructure. But what we're doing is creating permanency and creating a runway where an investment can last 10 to 20 years because it's a great business. It's a business you want to own. So the criteria there is having some form of a cash yield looking to underwrite to returns in that 10% to 12% range, and we see a very target-rich environment for those types of opportunities. And typically, those are big checks. Those are big positions. You're buying big businesses that have stability and scale. So that's how we have a lot of conviction. And then obviously, our flagship product is doing quite well. The second fund is now, as we mentioned on our call, over 68% invested. So we've done a good job deploying the second fund. Keep in mind, it just closed in December. So we've been able to deploy capital rapidly in the second fund. And the other thing we're doing is a lot of co-invest. We're giving our investors a chance to go deeper into opportunities that they like across our 23 companies. So we'll continue to issue co-invest capital where, once again, we're getting paid fee and carry for those types of opportunities.

Great. Questions that have come in to us over the chat box, and I think you got this on your earnings call as well. It's just a question about REIT qualification. And does it get harder as the investment management business grows. And so I'll ask that, but also follow up with 2 others, which are slightly different. As you talk to your investors, how important is REIT qualification to the current investors in Digital Bridge? And then is there a risk if Digital Bridge is no longer a REIT that there could be significant investor turnover from that?

Yes. So I'll take them all 3 in order. First and foremost, I think we've indicated a pretty pragmatic view around the REIT. We've looked at -- staying a REIT, we've looked at becoming a C-corp. Thankfully, for us, we don't have any tax leakage related to migrating to a C-corp. So that was kind of the first gate -- would investors suffer any negative tax consequences. The answer to that is definitively no. So that was important because we needed to understand the goalpost of what we were doing. The second point to your question is just around what I would call almost a problem of riches, which is when you have one division that's sort of outpacing the other division. And really, I think it was a function of really investors globally being underallocated to private digital infrastructure investing. And everywhere that I've traveled in the last 2 years, which is pretty extensively in talking to LPs, they all say the same thing, which is we're over allocated to private equity and real estate, we're under-allocated to renewables and digital infrastructure. Can you help us?" -- and we say, yes, we can help you. And so I think our ability to form capital has been, I don't want to say surprising, but I think investor appetite is very strong in private markets for digital infrastructure assets, which is why the coverage universe and digital REITs has gone from 20% to 9% largely because private capital has flown into the space and has taken a lot of these businesses private. So the attitude that we have on the team is, look, first and foremost, we are a digital operating business. That's what we do. We operate great digital infrastructure businesses, and that will never change. That's the same thing we've been doing for 27 years. So I don't anticipate changing my line of profession and nor does my management team intend to change what we do. We have total conviction in what we're doing, whether it's on the digital operating side or on the digital IM side. Both businesses are putting up good growth. Obviously, IM had a great year last year. We do like, Michael, where M&A prices are starting to move a little bit. We're starting to see a little bit of thawing in these -- in the sort of the crescendo of these multiples. So that presents an opportunity. And I would say, broadly, we're seeing more opportunity, which is good. And that obviously accrues to the benefit of our digital operating business. Eventually, this is a decision that we wake up as a management team, and we don't have total control over. The IRS has kind of control over whether we stay REIT or don't stay REIT. Logically, if we have one business that's growing at 25% to 35% CAGR and the other one is growing at 6% to 8%, you can probably figure out that we won't stay at REIT at some point if that continues. Now if digital operating has a great year, and it grows at 25% to 40% and digital IM grows at 10%, and you can see a world where we stay a REIT. We're going to keep investors or keep the analyst community posted every quarter. I mean our intention, as we've always stated, is to stay a REIT. We prefer that format. Your last question is more interesting, which is what our investors say. None of our investors have said if you do REIT, we are leaving you. So that's -- I haven't heard that yet. And I think we've met with 32 investors this morning. Most of our meetings were 4 x 1s and 5 x 1s. I think investors are curious as to where we're going and what the strategic direction is. We've been unwavering in our strategic direction. Our strategic direction of the business has not changed. We believe we have 2 powerful business units that are growing and have a lot of runway to grow. And now most importantly, we have the purchasing power to go do something, cleaning up the legacy assets was something we had to do last year. And so now we're equipped with a lot of capital. We have the cash on our balance sheet, and we have the firepower to go buy good assets. So stay tuned. I think it's -- the strategy and the intention remains the same, which is I'm solely focused on growing our digital earnings, and that's what we're going to do. We're going to continue to give you good guidance and we're going to continue to deliver great digital earnings. And if those earnings go to a point where we have to be REIT, we'll share that information with our investor base, and we'll continue to keep growing. But I don't see it as a limiting factor on our share price, nor do I see it as a limiting factor on the growth of our business.

So given a little preview of where we're going. So we have 2 questions that we're going to want to hit on that we're asking all of our companies at the conference regarding growth in the ESG. We've got a rapid-fire coming up, which I know everyone is waiting for. If there's anything in between that's important to you. Please use the mic, please send it into chatbox. We'll try to squeeze it in, in the time that we have left. So on growth, what is the biggest growth opportunity that you believe the market is not giving you credit for?

Well, I could say tongue and cheek, it's our carried interest that we have a ton of that's accruing and building. But as you know, the Street doesn't give us credit for that. So I guess I have to pass on that. I would say the areas where we don't get probably enough credit for is really our ability to continue to shape and form capital. So as I said earlier, our second sort of beat and raise in almost 2 quarters, hopefully, the market is getting comfortable with our ability to raise capital and most importantly, raise capital in long-term vehicles. So if you look at Digital Bridge Partners 2, that's an 11-year fund. If you look at the -- some of the continuation vehicles that we're raising, those are sort of 20-year end of fund life vehicles. And so the reason I mentioned that is because we don't always get credit for the permanency and the duration of those cash flows, much like a hyperscale tower lease or an edge compute lease or any of the digital leases we have, which are on average 5 to 20 years in duration, our fee streams on the IM side typically have a weighted average duration of like 11 to 12 years. So once again, it's about creating earnings. It's about giving investors high visibility into where we're growing, which was sort of counter to what the former management team here did. We give you very specific guidance, and we're giving you a very clear and long path on earnings -- and like long earnings, I guess.

Was there anything else you wanted to share?

No, I think that's it.

Another question that we're asking at this conference is ESG, your #1 ESG priority for 2022?

It's just to continue what we started in 2019, Michael. Our pledge to get to a completely carbon neutral portfolio by 2030 is in flight. We had another portfolio company reach carbon neutrality last year. We now have really good dashboards and metrics that we can measure our carbon footprint and how we offset that. I think the other thing that we're really excited about is trying to -- as we build new facilities and new data centers or new infrastructure, we're actually building renewable sources of energy nearby or having people build for us. This is going to be the challenge of all digital REITs going into the next decade is how do you pair all of this growth with renewable sources of energy. So we're looking at different ways to partner with other infrastructure investors, other fund managers. Stay tuned, but this is something that we're very focused on.

So we'll hit our rapid fires and then we'll try to come back and squeeze in one or two more. So in terms of the rapid fire, 10-year treasury yield a year from today.

I would say, up 80 basis points.

Okay? Will your property sector have more or fewer public companies a year from now?

In my vertical fewer.

Okay? And same-store, which I know is a complex question because of all the assets you cover in digital infrastructure, same-store NOI growth for your property sector overall, not your company in 2023?

So ex greenfield, ex-M&A. Right? The true organic growth.

Same-store NOI?

I'd say same-store NOI growth for us will probably be between 6% and 8%.

Okay.

That's across fiber, hyperscale towers. Like if you blend all of it together, we do have some businesses that are posting double-digit growth, and we do have some businesses that are posting 2% to 3% organic growth. And so naturally, I think the middle kind of fits there.

And in terms of just maybe squeezing two more in. One on capital allocation, how should investors think about the on-balance sheet capital allocation in terms of taking the free cash and investing it in assets versus dividends versus buybacks?

So for me, I think the first order of cash is to continue to reinvest in the physical plant, which is new infrastructure, which creates new revenues and new EBITDA and new AFFO. So that's always our priority. We're a growth REIT. People aren't buying our stock because they want the dividend. I think that's been pretty clear. Second priority would be that as we mentioned on our call, turn the dividend back on and start returning capital back to shareholders, even if it's a de minimis dividend, that's something we've committed to in 2022, so we will do that. Share buybacks right now don't seem like the best use of our capital from a return perspective. I know other digital REITs like to buy their shares back my friend about a mile up the road in Boca is a big buyer of his own shares. But we have so much opportunity, Michael. We don't need to buy back our shares. When you got shovels in the ground in 20-plus countries and you've committed to $6.6 billion of new CapEx, you don't really have time to buy back your shares.

And so in our last minute, over time, when we've met -- you've done a really great job of identifying maybe areas where the growth potential, whether it's better or worse, is underappreciated by the market for particular subsectors of what you focus on, whether it's towers, parts of data centers, fiber. As you've had conversations with investors since your earnings, today, what do you see out there that's maybe misunderstood in terms of the underlying growth prospects for better or for worse?

Look, I think for better, I think investors are, first of all, able to look at us as a clean slate. Having clarity around what we do, waking up every day and not worrying about occupancy in a health care facility or renovating a hotel room, I mean that stuff we no longer have those questions, which is great. So I think the market now is beginning to understand and appreciate the clarity of a full digital diversified REIT that is also an investment manager. I think also investors didn't fully appreciate the magnitude and size and the scope of our investment management platform and our ability to raise capital. So now as investors have stopped asking questions about whether or not we're rotated and they can actually look at us specifically as a pure play. It allows them to ask more thoughtful questions about how do you form capital, how do you put strategies together, where do you get these great management teams. And we're having really good thoughtful conversations... We're able to have, I think, better conversations about the things that really matter, which is really people, putting capital to work, forming capital, and creating long-term sustainable revenues, which accrues to AFFO.

Marc, great to see you. Thanks for being here.

Thanks, Michael. Good to see you. Thank you.