U.S. data center owner DataBank is funding its development pipeline to help meet demand from cloud providers and companies looking for more powerful real estate facilities with increasing use of artificial intelligence. has secured a loan of $725 million.
The company has recently been “very active” in the debt and equity financing markets, Data bank Chief Financial Officer and President Kevin Ollie told Costar News. Ollie said the new credit facility offers a dedicated construction runway for the construction and leasing development of U.S. data centers, and is much higher than the initial target of $400 million that the Dallas-based data bank originally loaned. An increase was expected from the payers.
“This is our first development financing that we’ve done,” Oli said in an interview. “This new credit facility will allow us to meet this demand more quickly by shortening the financing and construction timelines at all of our campuses, but especially as we have announced in Northern Virginia and Atlanta that we have new have increased activities.”
New and emerging artificial intelligence applications have created “unprecedented demand” for data center capacity, he said. He said this demand played a key role in Data Bank increasing its credit facility limit with borrowers. Analysts have said that increasing technological advances are requiring more digital hubs and increasing amounts of power from a variety of providers, stifling competition.
“It makes us dry powder more flexible and allows us to have some deep-pocketed lenders with us,” Ollie said.
In the past, a data bank would need to obtain a construction loan tied to a specific project to finance the development of a new data center. With this new credit facility, with the help of a group of 14 banks, the capital will fund the expansion of existing US properties, including campuses in New York, Denver, Minneapolis, Salt Lake City and Dallas.
Databank said the TD Securities-led financing provides Databank with access to capital for its long-term growth plans and a source of funding to meet the company’s rapid demand for capacity. .
Oli said the company could increase its credit facility with these lenders directly through loans if needed.
Oli said once the data centers are fully built and leased, the hubs will move from the credit facility to other financing arms, thereby keeping projects in the pipeline to meet demand. will become a “conveyor belt” of funding for The data bank is planning capital expenditures of $1.25 billion this year, up from about $700 million last year.
Ollie told CoStar News that artificial intelligence “was a key driver of this dramatic growth in demand, which led us to new funding like this facility.”
Projects in Databank’s development pipeline have lead times of 18 months to 24 months, allowing the company to invest capital today to fund projects years into the future. This year, the company aims to supply 86 megawatts of electricity to consumers. Next year, the data bank plans to add 51 MW, with another 143 MW planned for completion in 2026.
Tenants are leasing space as fast as the data bank can develop megawatts, he said.
This is Databank’s second green round of financing, following A credit facility it had secured in February.. To qualify as a green loan, the facilities being financed must meet specific sustainability standards for water conservation and carbon emissions reduction. The properties in the company’s portfolio, totaling more than 65 facilities in 27 U.S. metropolitan areas, are contributing to its goal of becoming carbon neutral by 2030.
TD Securities was the managing agent, joint lead arranger and joint book runner on the deal. The other joint lead arrangers and joint book runners were Citizens Bank, Kobank, Deutsche Bank, First Citizens, and Societe Generale. JP Morgan, Nomura Securities, RBC Capital Markets and Regions Bank were also joint lead arrangers. Bank of America and Goldman Sachs were joint document agents. Cadence Bank and Preferred Bank also backed the deal. Jones was legal counsel for Day Data Bank.