Great article! It would be interesting to understand which milestones Meta needs to hit before it can sell the project. Data center developments typically offer very high developer margins — I’ve seen post-completion values reach up to 2x the construction cost. I would expect Meta to capture this initial value uplift before selling to private equity.
Another argument for doing sale-and-leaseback is flexibility: by offloading the project, Meta can pivot to newer data centers over time. These leases often include extension options, allowing Meta to reassess its plans after 15–20 years - especially if power has become less constrained. Some of the exec's at the hyperscalers mention this as the reason for doing sale-and-leaseback.
Also interesting with the 90% loan-to-value they’re able to secure — well above the typical 60% LTV most banks offer. Equity was so last year ;-)
Very insightful comment. No clue on the specific milestones, but my sense from the research was that financing from Apollo and others would come in fairly early in the construction process (rather than post-completion).
@Michael Burry @Kakashii @Tom Pigott
Meta datacenters financed by an Apollo SPV and insured by Athene.
Great article! It would be interesting to understand which milestones Meta needs to hit before it can sell the project. Data center developments typically offer very high developer margins — I’ve seen post-completion values reach up to 2x the construction cost. I would expect Meta to capture this initial value uplift before selling to private equity.
Another argument for doing sale-and-leaseback is flexibility: by offloading the project, Meta can pivot to newer data centers over time. These leases often include extension options, allowing Meta to reassess its plans after 15–20 years - especially if power has become less constrained. Some of the exec's at the hyperscalers mention this as the reason for doing sale-and-leaseback.
Also interesting with the 90% loan-to-value they’re able to secure — well above the typical 60% LTV most banks offer. Equity was so last year ;-)
Very insightful comment. No clue on the specific milestones, but my sense from the research was that financing from Apollo and others would come in fairly early in the construction process (rather than post-completion).
This is great! Where do you get all the terms?
Honestly just stitched together from various articles. And then NNN comps from sources like this: https://www.alantra.com/wp-content/uploads/2025/01/Data-center-activity-2024-vF.pdf
Thats great, thank you!