Fleet Data Centers is on an endeavor to raise billions of dollars to build out a data center campus in Reno, Nevada, for a major tenant. The company is the data center development arm of U.S.-based major firm Tract. The companies this week announced the pricing of $3.8 billion aggregate principal amount of 5.875 percent senior secured notes due in 2031. Moreover, the proceeds are expected to be used to finance a portion of the development and construction of the center.

The scope entails a 230MW utility capacity (200MW critical IT) turnkey data center and electrical substation. The data center will be located on a 252-acre property in Storey County, Nevada. However, the officials owners of the data center facility have noted yet been disclosed. Nonetheless, there are leads towards who the project’s owner may be. The project has been 100 percent leased to an unnamed “AA- investment grade rated tenant with a market cap in excess of $3 trillion” on a 197-month (16.4-year) ‘triple net’ (NNN) lease. Another data center owner that had been mystic until recently is Amazon who were recently purported to be behind a data center campus in Washington.

Outlook on the Nevada Data Center Campus in Reno

Despite not knowing the official owners of the Nevada data center campus , companies with a market cap above $3 trillion are few. Only Nvidia, Apple, and Google parent Alphabet currently above that threshold. While the companies have not specified the tenant, reports surfaced last week suggesting that Nvidia was the company set to lease the development. “This transaction sets a new benchmark for the data center sector — the highest-rated, largest issuance, highest loan-to-cost, and tightest pricing for any single data center high-yield bond project financing to date,” Fleet noted.

Fleet’s fund, Fleet Data Centers I, LP (Fleet I), also announced the pricing via its wholly-owned subsidiary, SV RNO Property Owner I, LLC. Founded by former Cologix CEO Grant van Rooyen, Tract first announced plans to develop a property in Storey County, Nevada, in October 2023. Afterwards, they acquired more parcels of land in June 2024, bringing its total land ownership in the area to more than 11,000 acres.

Tract aims to develop ‘master-planned’ data center parks, getting sites zoned, powered, and shovel-ready for other companies to develop data centers on. It then launched Fleet to actually build data centers in those parks and other sites not owned by Tract. Nonetheless, the build-out in Nevada is Fleet’s first confirmed development. Nvidia runs its own data centers and gets additional capacity by leasing space from cloud providers such as Amazon Web Services and Microsoft Azure.

Project Factsheet

• Project Name: Nevada Data Center Facility in Reno
• Company: Fleet Data Centers.
• Parent Company: Tract
• Funding Vehicle: Fleet Data Centers I, LP (Fleeet I).
• Issuing Authority: SV RNO Property Owner I, LLC.
• Combined Financing Raised: $3.8 billion.
• Instrument: 5.875% Senior Secured Notes.
• Maturity: 2031
• Form: Financing of high-yield bond projects.

Location

• City: Reno
• County: Storey County
• State: Nevada
• Country: United States
• Site Size: 252 acres

Technical Scope

• Total Utility Capacity: 230MW
• Critical IT Load: 200MW
• Delivery Case: Turnkey data center campus.
• Infrastructure Included: Specific electrical substation.

Lease Structure

• Lease Type: Triple Net (NNN)
• Lease Term: 197 months (16.4 years)
• Pre-Leasing Status: 100% leased

Tenant Profile:

• AA- investment grade rating
• Capitalization in the market of over $3 trillion.
• Identity undisclosed
• Potential Tenant Candidates (>3 trillion market cap)
  • Nvidia
  • Apple
  • Alphabet
• Speculation about the Industry: Nvidia.

Development Background

• Initial Land Announcement: October 2023.
• further Land Acquisition: June 2024.
• Total Acreage of Land Controlled by Tract in Storey County: 11,000+ acres.

Business Model:

• Planned data center parks of masters.
• Ready-prepared, electrically, and shovel-ready sites.
• Fleet designed to build facilities in Tract developments.
• Status: The initial confirmed development project of Fleet.

Strategic Significance

• Biggest issuance of high-yield bonds in one data center project ever.
• Benchmark loan-to-cost structure
• Anchored by long-term investment-grade hyperscale tenant