Blackstone’s QTS Eyes Phoenix Data Center No. 3

At full buildout, this development could extend across 375 acres.

QTS data center
QTS Glendale will be constructed according to the firm’s Freedom standard design. Image courtesy of QTS Realty Trust

QTS Realty Trust is expanding its presence in metro Phoenix. Plans call for a 3 million-square-foot data center campus in Glendale, Ariz., called QTS PHX 3, that could include 16 buildings of approximately 180,000 square feet each.

The 375-acre development site is north of Camelback Road and west of Loop 303 along Cotton Lane. QTS acquired the property in July 2022 for $255.3 million from First Industrial Realty Trust.

Designed to meet rapid, large-scale deployments, QTS Glendale is expected to have more than 750 megawatts of critical power capacity. A 29-acre substation is also slated for the site that has room for future growth, the Phoenix Business Journal reported.

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While development timetable was not provided, the project is expected to take several years to build once it receives approvals. QTS filed the initial plans with the City of Glendale in early 2023, several months after purchasing the site, according to PBJ.

“Data centers are large, complicated projects that require both thousands of skilled construction employees and specialized maintenance professionals once the site is in operation. We choose markets like Phoenix and Glendale because of access to a highly skilled and motivated workforce,” a QTS spokesperson told Commercial Property Executive.

QTS’ expansion in the Valley

The Glendale site will be the third location for the Blackstone-owned QTS in the Phoenix metro area. Last year, the company started building another phase at its 85-acre campus at 1200 40th St. in Phoenix. The multi-building campus is planned for 280 MW of capacity.

Another QTS data center is at 120 E. Van Buren in Phoenix. The facility has a 288,000-square-foot building and 32 MW of utility power capacity.

“QTS is investing in Arizona as a long-term partner and will continue to work with the state, counties and cities where we operate to ensure growth is additive to the area. As a colocation provider, we look to enter areas that are attractive to potential tenants as well,” the spokesperson concluded.

Private equity giant Blackstone acquired QTS, based in Overland Park, Kan., for $10 billion in June 2021. In July 2023, Blackstone announced it sold off other assets to fund an $8 billion commitment to build new data centers through QTS.

Phoenix, a growing data center market

A recent JLL North America data center report classified Phoenix as a primary data center market along with Atlanta, Chicago, Dallas-Fort Worth, Northern Virginia, Northern California and New Jersey. The secondary markets included Salt Lake City, Los Angeles, New York, Denver, Houston and Austin, Texas.

The Phoenix market ranked second after Northern Virginia for new transactions in 2023, totaling 784 megawatts, according to the report. The Valley had nearly 700 MW under construction at the end of last year, representing 100 percent of stock. The metro is expected to grow at significant rates over the next 5 years, alongside Dallas-Fort Worth, Chicago and Northern Virginia.

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