Target Hospitality Corp. announced a multi-year lease and services agreement to construct and provide comprehensive facility services and hospitality solutions for a regional data center campus. This new Data Center Community will be located in the Southwestern United States, marking a strategic expansion into a new commercial end-market.
The purpose-built community is designed to support an initial population of 250 individuals, with the capability to expand to approximately 1,500 individuals based on growing customer demand. The Data Center Community Contract has an initial term through September 2027 and is expected to generate approximately $43 million of committed minimum revenue over this period. Target anticipates realizing approximately $5 million of this revenue in 2025, with first occupancy expected by late 2025.
Target Hospitality will utilize a portion of its existing asset portfolio for the construction of this premium community, resulting in a minimal net capital investment of approximately $6 million to $9 million in 2025. This approach is expected to enhance economic returns and maintain the company's financial flexibility, allowing it to capitalize on the significant investments in technology infrastructure across the domestic market.
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