Cogent Communications is cashing out of a chunk of its real estate, agreeing to sell 10 U.S. data centers to a buyer backed by I Squared Capital for roughly $225 million and steering the proceeds straight into debt reduction. The sites stretch from Phoenix and Southern California to Atlanta and Houston and include a mix of purpose-built carrier neutral facilities and former Sprint buildings. The deal lands as private infrastructure investors pour money into smaller edge and colocation properties to keep up with growing demand for low latency AI inference capacity closer to end users.
In a press release, Cogent Communications said its indirect subsidiary, Cogent Fiber, LLC, signed a definitive agreement to sell the 10 facilities for an aggregate purchase price of $225 million to a newly formed entity sponsored by I Squared Capital. The company listed locations in Phoenix, Anaheim, Burbank, Stockton, Atlanta, Chicago, Elkridge (Md.), Kansas City, Nashville and Houston, and said the sale is expected to close on the later of June 12, 2026, and the expiration of the Hart Scott Rodino waiting period.
Buyer Plans U.S. AI Inference Platform
I Squared is pitching the deal as the foundation for a new U.S. colocation and AI inference platform, committing up to $1 billion for upgrades and follow on acquisitions. The portfolio includes roughly 53 megawatts of installed power capacity and about 259,000 square feet of available colocation space, according to Business Wire. Gautam Bhandari, I Squared's co founder and managing partner, pointed to location, power and connectivity as the key levers for data center value as the market shifts toward high density inference workloads.
Proceeds Earmarked To Cut Debt
Cogent had already told investors that proceeds from selling its initial batch of 10 former Sprint data centers would be contributed to Cogent Communications Group, the company's borrowing entity, and used for net delevering, according to Cogent Communications May 4 earnings call transcript. Executives framed the plan as part of a tightened capital allocation strategy that prioritizes paying down debt ahead of upcoming maturities.
Industry watchers say the sale highlights a broader move by investors to snap up edge and regional colocation sites as AI workloads migrate from giant centralized training clusters to inference infrastructure closer to users. Reuters characterized the buy as a bet on AI inference. Cogent's stock had been under pressure earlier this year, which helps explain why management is leaning on asset sales alongside other refinancing tactics.
Once the transaction closes, I Squared plans to stand up a separate operating platform to own, operate and expand the portfolio. The firm says it will invest in liquid cooling and higher density power configurations to attract latency sensitive customers, and is emphasizing the sites' dense fiber connectivity and proximity to local internet exchanges as selling points for both retail colocation and AI inference use cases.
The timing still hinges on regulatory clearance. Cogent's release says the sale should close on or after June 12, 2026, subject to the Hart Scott Rodino waiting period, while the buyer is talking about the schedule more cautiously and has suggested approvals could push closing into the back half of 2026. Investors, customers and market observers will be watching the required filings and future company updates for firmer guidance on when the deal will wrap and how the operational handoff will play out.
