QTS Eyes $1B ABS Deal on Data Center Collection

Blackstone’s QTS is seeking to obtain $1 billion through a series of ABS securitization notes, according to a Fitch Ratings presale report. The deal is expected to close during the week of Oct. 5.

The transaction involves seven hyperscale data centers totaling 2.2 million square feet and 253.5 megawatts, with two properties contributing as part of the issuance. They are located across key data center markets including Phoenix, Richmond, Northern Virginia and Dallas-Fort Worth.

The financing package will consist of up to $719.8 million in fixed-rate loans and up to $305.3 million in floating-rate notes. All 10 loans will be interest-only before their repayment dates and have a 30-year legal final maturity date. Proceeds will repay existing debt, fund reserves and support general corporate needs.

KeyBank National Association will act as servicer, while Wilmington Trust will serve as indenture trustee. Deutsche Bank Securities will work as sole structuring advisor and bookrunning manager.

The transaction follows QTS’ earlier $870 million ABS issuance under the same master trust, which closed in July and was backed by five data centers. The current financing adds two properties to the collateral pool.

A data center portfolio in four markets

The Phoenix facilities, known as PHX2DC2, PHX2DC3 and PHX2DC5, are at 1250, 1400 and 1500 N. 40th St. Delivered in 2024, the trio is part of QTS’ second data center campus in the metro, which includes five buildings on an 80-acre lot near Phoenix Sky Harbor International Airport. The campus is set to scale up to 210 megawatts.

The two properties within metro Richmond are RIC2DC3 and RIC2DC5. Located at 6050 and 6060 Technology Blvd. in Sandston, Va., the facilities are part of an 85-acre data center campus some 17 miles from the city’s downtown. The five-building complex, still under development, is expected have a total capacity of 180 megawatts upon delivery.

The Northern Virginia data center, dubbed ASH2DC2, is at 44655 Quality Tech Lane in Sterling, Va. The facility came online in 2023 as part of QTS’s two-building campus in the Ashburn, Va., area, totaling 75 megawatts.

DFW1DC4, located at 6311 Longhorn Drive in Irving, Texas, is the last property involved in the upcoming transaction. It is part of a 56-acre campus with six facilities and a 165-megawatt power capacity.

Four investment-grade tenants and three small network carriers fully occupy the portfolio, the report shows. The leases have a weighted average remaining term of 12.9 years.

More QTS moves

As one of biggest data center developers in the U.S., the company keeps expanding in various states such as South Carolina, Utah, Georgia and Iowa. Recent construction milestones include the topping out on the first facility within the $8 billion project in Rock Hill, S.C., the first QTS project in the Palmetto State.

The company also secured a $1.3 billion CMBS loan for the refinancing of a data center in New Albany, Ohio, in June. Recently completed, the facility has a 66-megawatt capacity and is fully leased to a single tenant through 2045.