Blackstone Lands $550M for Data Center Portfolio
Amazon Web Services fully occupies the collection.
Blackstone has secured a $550 million CMBS refinancing loan backed by a 10-property, 1.7 million-square-foot data center collection spread across Northern Virginia, according to a Morningstar DBRS report. Boasting a total power capacity of 376 megawatts, the portfolio is fully occupied by Amazon Web Services.
Citigroup provided the financing. Computershare Trust Co. serves as trustee and KeyBank as special servicer. Proceeds will be used to refinance an existing $335 million loan and $205 million were returned to the borrower in the form of cash equity.
READ ALSO: Data Centers: Pressured for Power
COPT Defense Properties, which developed the data centers between 2013 and 2019, also owns a 10 percent interest in the portfolio. The collection’s estimated value is $1 billion, while the land value is nearly $879 million.
Located in Ashburn, Va., Sterling, Va., Manassas, Va., and Haymarket, Va., close to the Data Center Alley and Dulles International Airport, the facilities range from 147,615 square feet to 428,191 square feet. Some of the data centers achieve nearly 1.1 annualized power usage effectiveness, while the whole collection maintains an N+1 electrical and cooling system redundancy.
The weighted-average remaining lease term is of nearly 4.2 years across the facilities, with a fully extended lease of 21.5 years. AWS intends to invest nearly $12 billion in the portfolio for various customer build-outs. Nearly $3.4 billion would be spent for permanent improvements across HVAC systems, fiber connections, UPS systems, backup generators and switch gears, while some $8.6 billion will go toward temporary improvements across servers, racks, cabling and other on-site fit-outs.
Investors’ appetite for data centers is growing
Despite power constraints, the data center sector is expected to grow some more this year, as demand is outpacing supply, a recent JLL outlook shows. The global capacity will likely expand 15 percent per year through 2027, with the Americas, led by the U.S., expanding to 30 gigawatts. Investors will remain interested in the sector as AI applications fuel its growth.
Recent data center investment deals include Apollo’s purchase of a majority stake in Stream Data Centers. The company will provide funds to speed up the development of 650 megawatts of power capacity in metros such as Chicago, Atlanta and Dallas.
The partnership of Nuveen and Snowhawk also ventured into the sector by becoming an equity investor in Prime Data Centers. The operator aims to raise more than $2 billion for its expansion in power-constrained markets.
Meanwhile, Vantage Data Centers received $5 billion in financing for its expansion. Some of the proceeds fund the company’s campus underway in New Albany, Ohio, while the remainder will augment its credit facility.
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