Blackstone Banks $600 Million on Data Center Firm's Growing Demand
Summary
The worlds largest private equity firm is investing $600 million to financially back Aligned Data Centers largest data center yet in the Salt Lake City area in a move signaling extended investment strength for this real estate type.An entity of Blackstone made an "initial transaction" of $600 million in a senior secured credit facility to Aligned Data Centers, based in the Dallas area, with the ability to "build on future opportunities" together, Aligned Chief Financial Officer Anubhav Raj said in a statement Tuesday. DataBank also recently raised $533 million to help it meet capacity amid the global AI boom.Investors are banking on data centers as uncertainty is attached to some other real estate types. The real estate fundamentals behind data centers, including rental growth and investor returns, remain an appealing draw. In tight markets, rents could rise an additional 10% by next year, JLL said in its latest North American Data Center report. "For Aligneds project in the Salt Lake City area, the financing is secured through Blackstone Credit & Insurance and backed by insurance accounts managed by Blackstone Credit & Insurances Infrastructure and Asset Based Credit Group, according to the statement.The funds are expected to help expand an existing data center called SLC-03 in West Jordan, Utah.The two-story, 80-megawatt build-to-suit project, Aligneds fourth in the Salt Lake City area, is being expanded for an existing confidential client, a spokesperson on behalf of Aligned told CoStar News.Additional information on the expansion wasnt immediately available.Salt Lake City is experiencing the fastest acceleration in data center construction in the nation because of the areas low power and gas costs, and growing importance as a technology hub, JLL said in the report.Aligneds new partnership shows Blackstones ability to support "large-scale digital infrastructure build-out with flexible and efficient financing solutions," Robert Horn, global head of infrastructure and asset-based credit at Blackstone Credit & Insurance, said in the statement.