T5 Expanding Footprint In First Stages Of Multibillion-Dollar JV With QuadReal

Data center developer T5 Data Centers is expanding its footprint in Georgia and Chicago amid the firm’s growing focus on hyperscale megacampuses. 

Atlanta-based T5 announced plans last week for a 1.2 gigawatt data center campus in Georgia, its fourth in the state. The firm also acquired 32 acres near Chicago, adding to an assemblage on which it is building a similarly scaled megacampus.

The two projects represent the first stages of a multibillion-dollar joint venture with Canadian real estate firm QuadReal Property Group that the firm hopes will see them build gigawatt-scale campuses in markets across the U.S.

“Things are not slowing down at all,” Robbie Sovie, the firm’s executive vice president of development and construction, said to Bisnow when asked about the data center pipeline. 

In Georgia, T5’s latest proposed campus may eventually have as many as 20 data centers on-site and come with a price tag north of $16B, CEO Pete Marin told The Atlanta Journal-Constitution last week. 

While the firm hasn't disclosed the project’s location, a document filed by T5 last week with the Georgia Department of Community Affairs shows plans for a project called “T5ATL IV” in the Fulton County city of Fairburn southwest of Atlanta. According to the filing, T5 plans to initially build three buildings totaling 1.3M SF at the Fairburn site.  

A campus with more than a gigawatt of capacity would be T5’s largest development in Georgia by far, and it continues the firm’s expansion in its home state. T5 is building a 300-megawatt campus in Palmetto on 91 acres the firm acquired last summer along with a separate 300-megawatt campus in Lithia Springs. The company also operates a smaller facility in Alpharetta. 

In Chicago, the 32 acres T5 acquired in the North Shore community of Grayslake adds to 193 acres the firm already acquired in the town, The Real Deal reported. T5 has now spent nearly $60M in the past year acquiring land there for its proposed hyperscale campus. As in Georgia, the project has been pitched as 1.2 gigawatts of eventual capacity spread across up to 20 separate buildings.

The first phase of the Chicago campus may be delivered as soon as 2027, according to T5. 

The campus will be T5’s fourth, and largest, project in the Chicago area, a market the firm has steadily expanded in over the past two years. T5 is in the process of building a 36-megawatt facility in Northlake that was topped out last week. In March, T5 acquired a site in Elk Grove Village where the company plans to build another 36-megawatt data center, adding to the facility it already operates in the Chicago suburb. 

The planned gigawatt campuses in Chicago and Atlanta are the first of what T5 says will eventually be five similar projects launched in different U.S. markets through a joint venture with QuadReal. 

T5 and QuadReal have a long-running partnership and have previously developed data centers in Silicon Valley, Hillsboro, Chicago, Atlanta and Charlotte. The firms announced the shift toward gigawatt campuses in February, with T5’s leadership describing a Scaled Campus strategy in which massive campuses will be filled incrementally by 60-megawatt facilities. The JV plans to raise $8B specifically to support the five-campus effort. 

This push to build campuses at such a massive scale continues a period of rapid expansion for T5, which has data centers at 13 sites across the U.S. The company primarily serves hyperscale and large-scale enterprise tenants and has separate business lines focused on data center construction and operation for third parties. 

While the firm’s portfolio contains a range of data center assets ranging from multitenant facilities to campuses for cloud providers, the planned gigawatt campuses are the heart of T5’s expansion strategy, said David Mettler, T5’s executive vice president of sales and marketing.

The company may sporadically pursue smaller-scale development like the recently announced data center in Chicago’s Elk Grove Village, but such projects will be limited. 

“We’ll have tactical execution on special sites that we find that are available that we think will help our customers,” Mettler said. “But our bigger strategy is around the scale campuses.”

T5 is far from the only firm proposing campuses north of a gigawatt in data center hotbeds like Atlanta and Chicago amid power constraints that have pushed wait times for electricity from utilities to as long as a decade. But navigating these power constraints represents a competitive advantage for T5, Sovie said.

Sovie pointed to T5’s existing relationships with utilities and track record of successfully executing campus-scale projects in primary markets, particularly Atlanta and Chicago. When utilities are deciding which data center projects to prioritize, it’s companies with track records like T5 that are jumping toward the top of the list.

“Those are the people that the power companies are really listening to,” he said. “Some of the new entrants in the market, they're just throwing capital and trying to structure deals … we're hearing direct from the power companies that they're not getting a lot of attention.”