Companion files

The Digital Infrastructure Investor

Data Centers, Fiber, Towers and the Power Behind AI by the Numbers, With the Models Supplied

Julian R. Sterling

These are the companion files of The Digital Infrastructure Investor by Julian R. Sterling.The book on Amazon →

The Excel workbooks that go with the book. One infrastructure fund studies and buys three assets: Halvard DC1, a data center leased to a hyperscale cloud provider with a pre-leased expansion waiting for its grid connection; Oakmere Fiber, a fiber-to-the-home network half built; and Pellam Towers, 850 wireless towers. The data center costs $900 million, and its signed lease pays back 34.2% of that price. The same building earns 10.69% on equity after a retrofit and -2.98% if its halls are stranded, with identical rent until year 8. Every figure the book prints is reproduced here by live formula and checked.

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The files

• Chapters 2 to 7 and 15

  Halvard DC1, the data center

  The lease at $138 per kW per month on 32 MW, the power clause and its energy margin ($2.42 million in year 1), phase 2 and its grid connection, the four outcomes at lease end, three valuation methods from $557.1 million to $1,616.7 million, the acquisition loan and the refinancing one year before the lease ends. Base case equity IRR 10.23%; a power price 4.0% above the assumption from year 5 already takes it below 10 percent.

  Download189 KB

• Chapters 8 to 11

  Oakmere Fiber, the network

  Sixty thousand homes passed building to 120,000, penetration by cohort, ARPU, churn, EBITDA and free cash flow, the open access variant (7.55% against 10.34% for retail) and the grid of penetration against cost per home passed. 10 percent needs 39.4% penetration.

  Download191 KB

• Chapters 12 to 14

  Pellam Towers, the portfolio

  850 towers, tenancy ratio 1.45 at purchase, ground leases and buyouts (a buyout returns 9.32% held at 16 years of rent, 11.50% sold at the tower multiple), the operator merger, the debt and its covenants. Equity IRR 10.06%.

  Download70 KB

• Chapters 16 and 17

  The fund's portfolio and the stress test

  The three assets' equity cash flows in nine scenarios. Portfolio equity IRR 10.21% in the base case and 4.05% if the next chip generation arrives early, although fiber and towers are untouched.

  Download36 KB

• For your own assets

  Blank models

  A single-tenant data center lease, a built fiber network and a tower portfolio, compact and empty. Nothing computes until every yellow cell is filled; a Progress sheet counts what is left.

  Download15 KB

• Practice

  The 60-minute test

  A new small case: a 12 MW data center, a fiber cluster and a tower cluster. Twelve questions marked as you type, and an answer key computed by live formula from the case.

  Download10 KB

Conventions used throughout

Units	Millions of US dollars unless a cell says otherwise; rent in dollars per kW per month; energy in MWh.
Time	Purchase at year 0, ten years of ownership, sale at the end of year 10; annual cash flows at year end. Year 11 is used only for the data center's forward NOI at exit.
Returns	Equity IRR after debt and unlevered IRR before it, all before tax. Fiber carries no debt.
Checks	Each main workbook has a Checks sheet: printed figure, live value, numeric gap, status, and an overall status that reads PASS only if every check passes.
Inputs	Yellow cells with blue type. Nothing is typed inside a formula.

Opening the files

The workbooks open in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers. They use no macros and no links to other files, so nothing needs to be enabled or trusted. Everything in the case is fictional and nothing here is investment advice.

Also by Julian R. Sterling

The books closest to this one. The full list of titles is on the author page.

• The Data Center Development HandbookThe developer’s side: land, grid and construction, and what a twelve-month slip costs.
• The Infrastructure Investment AnalystDebt sculpted to a coverage floor, and one asset valued twice to the last decimal.
• The Project Finance HandbookTwo infrastructure deals modeled end to end, and one of them does not work.
• Energy TradingA position report that is correctly computed on a book that is short, and the margin call the next morning.

Articles on this book

9 of the calculations in these workbooks, worked out in full. All articles.

• How does the tenancy ratio drive cell tower returns?A second tower tenant pays back in 0.71 years; no new tenants cuts equity IRR from 10.06 to 5.72 per cent.
• What penetration rate does an FTTH network need to earn 10%?At 750 per home passed and 45 a month of ARPU, a fibre network needs 49.2 per cent penetration for a 10 per cent IRR. At 40 per cent it earns 7.43.
• What multiple should you pay for a cell tower ground lease buyout?A 20.0x buyout of an 18,000 ground rent escalating at 3.0 per cent returns 8.15 per cent held and 10.03 sold at a 25.0x tower multiple.
• Cost per home passed vs cost per home connected: how do they link?Divide cost per home passed by penetration, then add the connection: $850 passed at 40 per cent take-up and a $650 drop is $2,775 per home connected, 3.26 times.
• How does a data centre make money on power pass-through?Margin = IT MWh x (PUE cap x tariff minus actual PUE x supply price). A 32 MW lease at a 1.30 cap and 1.40 actual PUE earns $2.42m in year 1.
• How much of a data centre's price does the signed lease cover?Discount the lease cash flow over its remaining term: eight years of a 32 MW hyperscale lease are worth 308.22 at 7.5 per cent, 34.2 per cent of a 900 price.
• How do you value a data centre per MW?Value per MW = rent per kW-month x 12,000 x NOI margin / cap rate. At $138 and 5.50 per cent a hyperscale lease is worth $28.85m per MW, against $28.1m paid.
• How do you calculate a fibre customer's lifetime value with churn?LTV = margin x (1 minus churn) / (monthly discount rate + churn). $52 a month at 1.3 per cent churn and 10 per cent is $2,447, not the $4,000 of margin over churn.
• Open access vs retail fibre: which earns the higher IRR?On one 120,000-home FTTH network, retail earns 10.34% at 40% take-up and open access 7.55% at 50%. Wholesale needs 57.2% penetration to catch up.
• What EBITDA multiple can you pay for a cell tower portfolio?Solve the price for your target return: 850 towers earning 13.15m of EBITDA support 21.5x for a 10% equity IRR with a 21x exit, 16.6x with no new tenants.
• How is a dark fibre IRU priced against leasing the fibre?PV of the lease avoided less PV of the O&M fee: a 200 km pair leasing at $120,000 a year is worth $1,089,387 upfront over 20 years at 8 per cent.
• Does a liquid cooling retrofit pay at data centre lease end?Yes if the new rent clears $157.73 per kW-month: a $2.6m per MW retrofit at $168 is worth $26.16m per MW against $24.17m for a renewal.
• How much does a mobile carrier merger cost a cell tower owner?Count the duplicate tenancies decommissioned and run them through the exit multiple: 60 lost on 850 towers cut equity IRR from 10.06% to 9.02%.
• What price per home passed should you pay for a fibre network?Discount the cash flow and exit at your target, divide by homes passed: a 60,000-home network is worth $2,248 a home at 10%, $1,597 if penetration stalls at 35%.
• What does a grid connection delay cost a data centre?About 0.13m per MW per month on a pre-let expansion: a 12-month delay on 16 MW costs $24.45m of value, 7.3% of the phase, even though no rent is lost.
• How much debt can a data centre support?The lower of DSCR and LTV sizing, on contracted cash flow only: 672.7 million with a renewed lease, 116.4 million without, on the same 32 MW building.
• How much debt can a cell tower portfolio carry?At 7.0x EBITDA an 850-tower portfolio borrows 92.08 million; an 8.5x covenant leaves 17.6% EBITDA headroom, but interest exceeds cash after buyouts.
• How much is a lease amendment worth to a cell tower owner?On illustrative figures, a $400 a month amendment adds $4,368 of EBITDA for $6,000 of capex, worth $87,360 at 20 times, and 5.56 points of organic growth a year.
• How much are cross-connects worth to a data centre?Illustratively, cross-connects bring 20.0% of a colocation site's revenue but 36.0% of its EBITDA: $146.9m of a $408.0m value, $43,200 each.
• How much power does a 100,000-GPU AI cluster need?On illustrative figures, 100,000 GPUs in 10.2 kW 8-GPU servers need 142.8 MW of IT and 178.5 MW at the grid, about 1.8 kW per GPU and 1.22 TWh a year.

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