- DigitalBridge’s tower unit, led by Steven Sonnenstein, is scaling operating-heavy infrastructure to meet AI, cloud, and 5G demand.
- Through 11 tower platforms and Vertical Bridge’s ~500,000 sites (including 17,000+ owned/master-leased towers), the firm aims to monetize scale via recurring leases and multi-tenant conversion.
- The Verizon deal adds 6,339 U.S. towers for about $3.3B with a 10-year leaseback (extendable to 50), strengthening long-duration cash flows.
- Growth is constrained by power availability, pushing DigitalBridge to diversify into adjacent and international assets such as Europe’s GD Towers.
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DigitalBridge’s tower-led strategy can be seen as its central execution lever in the broader digital infrastructure race dominated by cloud services, edge computing, and AI inference requirements. By owning or managing tower companies globally (11 in total), the firm gains line-of-sight into valuation, operation, and financing dynamics before they become industry-wide pressures. This operating insight differentiates it from pure capital allocators and helps anticipate where demand will emerge—especially in tower densification to support AI-inference, 5G, and edge computing.
The Verizon-Vertical Bridge deal is a landmark in the U.S. tower market. Acquiring 6,339 towers for ~US$3.3 billion (with US$2.8 billion upfront) and a leaseback to Verizon for 10 years (extensions up to 50) allows Vertical Bridge (majority-owned by DigitalBridge) to capture recurring site lease revenue, convert single-tenant towers to multi-tenant, and relieve Verizon of fixed-asset burdens. [2,3] This adds to Vertical Bridge’s already large portfolio of over 500,000 sites and over 17,000 owned/master-leased towers. These numbers underscore the scale that DigitalBridge is achieving—not just through greenfield builds but by acquiring existing infrastructure.
However, scale alone won’t guarantee success. The company and its leadership repeatedly flag power and energy supply as critical constraints. With AI and cloud demanding not just low latency but high continuous compute, data centres and edge sites require reliable, often clean power close to end-users. If power infrastructure (generation, grid connectivity, renewables) lags, location arbitrage may shrink.
To mitigate risk and broaden its revenue base, DigitalBridge is moving into adjacent assets. For example, outdoor media infrastructure (billboards) which mimic passive physical asset characteristics of towers. Also, the acquisition of a 51% stake in GD Towers (Germany) together with Brookfield for €17.5 billion adds 40,000+ sites, further embedding DigitalBridge in Europe. These moves hedge against both geographical risk and operator regulatory exposure. [1,4]
Strategic implications span several fronts:
- Operators will increasingly outsource tower ownership/management to infrastructure specialists like DigitalBridge, freeing up capital for core operations such as network rollout and spectrum investment.
- Valuation multiples for tower and passive infrastructure assets are likely to remain rich, as seen in the GD Towers deal (~27× EBITDA).
- Power access emerges as the next domain of competitive advantage. Firms that secure strong energy relationships, grid access, and ability to deploy renewables will outperform peers.
- Regulatory regimes and lease agreements (site lease escalators, anchor-tenant rights, master lease structures) decisively affect returns; international diversification brings both opportunity and complex governance challenges.
Open questions include:
- How will energy market volatility (fuel prices, regulatory mandates, carbon pricing) impact the cost base and feasibility of new edge/data centre sites?
- What cap on tower densification exists due to zoning, permitting, and public opposition, especially in urban/edge areas?
- How sustainable are high valuation multiples and margin expectations in newer geographies (e.g. Europe) compared to core U.S. assets?
- Will DigitalBridge pursue further consolidation, M&A, or partnerships, particularly in fiber or small cells, or deepen exposure to edge/data centre verticals?
Supporting Notes
- DigitalBridge “owns and operates 11 tower companies globally… our networks handle tremendous amounts of data traffic… we see what’s coming.”
- Vertical Bridge manages over 500,000 infrastructure sites nationwide, including over 17,000 owned and master-leased towers. [2,3]
- In Sept 2024, Vertical Bridge agreed to acquire rights to lease, operate and manage 6,339 towers from Verizon for approximately US$3.3 billion, with US$2.8 billion upfront cash. [2,3]
- Verizon will lease back capacity on these towers under an initial 10-year term with options to extend up to 50 years.
- Steven Sonnenstein warns: “The availability of energy … is going to be the defining constraint” for the growth of AI and data centre compute.
- DigitalBridge’s entrance into European tower infrastructure via GD Towers in Germany: acquisition of 51% stake valuing GD Towers at €17.5 billion.
- The GD Towers deal reflected high valuation multiples (~27× pro forma adjusted EBITDA) and long-term master lease agreements with anchor tenants, indexed to inflation.