Cologix Raises $1.5B for Data Center Development
The build-outs will total 650 MW of capacity.
Hyperscale specialist Cologix has secured $1.5 billion, through a combination of debt and equity, to finance its further growth in the capital-intensive data center realm. Funds will support ongoing build-outs, as well as new developments in North America totaling 650 MW of capacity.
The build-outs are at the company’s campuses in various core markets, including Ashburn, Va., Columbus, Ohio, and Montréal. The new developments will be on recently acquired sites in Columbus, Des Moines, Iowa, and Vancouver, B.C.
The capital includes a $1 billion revolving multi-asset development debt facility and an additional $500 million in equity from both new and existing investors. The debt facility will provide Cologix with the flexibility to add new sites over time as needed. Both debt and equity raises were the result of strong investor interest, and were both oversubscribed, according to Cologix.
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This new financing follows the company’s $1.13 billion and Can$1.07 billion in asset-backed securitizations beginning in 2021, along with $3 billion in equity recapitalization in 2022. Those infusions have fueled the company’s growth in recent years.
Cologix is in active growth mode. In June, the company acquired two data centers in Iowa from Connect Des Moines, marking its entry into the Des Moines market. Cologix also inked a deal to buy additional land in that market that will enable it to build more capacity to meet growing demand.
U.S. data center market seeing monster growth
Overall, the data center sector continues to expand as growth in AI and other power-intensive computing ups demand. Data center supply in primary U.S. markets increased by 10 percent, or 515 MW, during the first half of 2024 and by 24 percent, or 1,100.5 MW, year-over-year, according to a CBRE report. The vacancy rate in primary markets fell to a record-low 2.8 percent at the end of June, down from 3.3 percent a year earlier.
A record 3,871.8 MW of capacity was under construction during H1 2024, up by 69 percent from a year earlier, CBRE noted. But such growth has a downside, as available power isn’t always there to support the development, meaning delays for construction completions.
Nearly 80 percent, or 3,056.4 MW, of the underway data centers were preleased. CBRE reported. Cloud providers continued to lease most capacity, but AI providers also accounted for a significant amount of demand.
Northern Virginia remained by far the largest market, followed by Dallas-Fort Worth, Chicago, Phoenix and Silicon Valley. Power availability is the top consideration in site selection.
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