I was more going for "why physical" and "why in the US" :)
(a) They think they will get better performance/latency (although in our application it does not matter much) (b) For various compliance
We had been using co-location so far for US but we don't want to continue this road because of high investment (especially when compared with Hetzner) and higher responsibilities (hardware issues, inventory).
I've heard of Server Mania (https://www.servermania.com/dedicated-servers-hosting.htm)
Not sure if they might fit the bill?
Of course, there are several cloud providers who could likely slot-in for you (Vultr, Digital Ocean, Chunk Host, AWS, GCP, Heztner, Azure ...)