Related Companies, a leading US real estate firm, has taken a significant step forward with the launch of Related Digital, a new unit dedicated to the development of data centers across North America. This ambitious initiative is aimed at creating a $45 billion pipeline with a total capacity of 5GW in both the United States and Canada. The main focus of these new facilities will be to meet the increasing demands from artificial intelligence and cloud hyperscale companies. As part of this expansive venture, Related Digital has pledged a minimum of $500 million in initial sponsor commitments and is working on raising up to $8 billion in private funding through a multi-phase capital-raising effort. The capital formation is being advised by Morgan Stanley, with funding commitments beginning in the latter half of this year.
Strategically Located Projects
The mission of Related Digital is being realized through a series of carefully planned projects in strategic locations. The first major project under this new venture is a pre-leased 64MW data center expansion in Ontario, Canada. This facility, which spans 25 acres, is set to be delivered this summer to a major hyperscale client. Such a development underscores the company’s commitment to rapidly scaling its operations to meet the burgeoning market needs. With an eye on future technological and business growth, the company is also planning a substantial project in Chicago. This development involves a 1GW campus situated on a 400-acre site that was formerly the US Steel South Works. This site will also partially accommodate the Illinois Quantum & Microelectronics Park, highlighting Related Digital’s support for cutting-edge technological advancements.
Continuing their expansion across North America, Related Digital has outlined plans to develop additional campuses. These include a 1GW site in Illinois encompassing 500 acres, a 1.2GW campus in Missouri covering 600 acres, and a 250MW center in Wyoming on a 115-acre tract. These sites are strategically chosen to optimize connectivity and support for growing market demands for data processing and storage capabilities. The innovative approach of Related Digital not only addresses the current needs of AI and cloud companies but also anticipates future technological advancements.
Leveraging Expertise and Sustainable Practices
Related Digital is leveraging the extensive experience and resources of Related Fund Management, its real estate private equity and credit investment affiliate. This strategic move allows the company to expertly navigate the complexities of data center development and operation. Integral to Related Digital’s plan is its partnership with EnergyRe for the generation of clean power. EnergyRe, also founded by Related Companies, specializes in wind and solar projects and brings a wealth of expertise in sustainable energy solutions to the table. This collaboration ensures that Related Digital’s data centers are not only high-tech but also environmentally friendly, providing reliable and clean energy sources that are crucial for the energy-intensive data center industry.
The leadership team spearheading Related Digital includes prominent figures from the digital infrastructure industry. Jeff T. Blau, CEO of Related Companies, has emphasized the critical need for data centers with dependable energy sources, recognizing digital infrastructure as a high-growth asset class. Chief Investment Officer Brent Behrman, who has past experience with industry giants such as CyrusOne, Compass, and Digital Realty, is at the helm of Related Digital’s growth initiatives. Additionally, Bill Stein, co-founder and former CEO of Digital Realty, lends his expertise as an advisory board member, further strengthening the strategic direction of Related Digital.
Future Implications and Industry Trends
The launch of Related Digital signifies a broader trend within the real estate and technology industries: the integration of real estate development with sophisticated digital and energy solutions. Related Companies brings decades of experience to this new venture, having managed over $70 billion in diverse investments since its inception in 1972. The firm’s considerable expertise in mixed-use, residential, retail, office, and hospitality developments provides a solid foundation for the execution of large-scale digital infrastructure projects. Related Fund Management, established in 2009, currently oversees approximately $12 billion in assets, underscoring the firm’s robust financial capabilities.
As global reliance on AI and cloud services continues to rise, the demand for sophisticated digital infrastructure grows correspondingly. Related Digital’s comprehensive approach, which encompasses development, complex infrastructure construction, and clean energy solutions, positions it as a key player in this evolving landscape. The ability to meet the technological and energy needs of major firms places Related Digital at the forefront of industry advancements. This strategic initiative by Related Companies is poised to significantly impact the future of digital infrastructure, reflecting a shift towards integrated, sustainable, and forward-thinking solutions in the real estate and technology sectors.
Key Takeaways and Future Considerations
Related Digital’s mission is being realized through meticulously planned strategic projects. The first significant venture is a pre-leased 64MW data center expansion in Ontario, Canada, spread over 25 acres. Scheduled for delivery this summer to a major hyperscale client, this development highlights the company’s rapid scaling efforts to meet growing market demand. Looking ahead, the company plans a monumental project in Chicago, involving a 1GW campus on a 400-acre site, formerly the US Steel South Works. This site will also partly house the Illinois Quantum & Microelectronics Park, showcasing Related Digital’s commitment to technological innovation.
Expanding across North America, Related Digital has outlined additional campus developments. These include a 1GW site in Illinois spanning 500 acres, a 1.2GW campus in Missouri covering 600 acres, and a 250MW center in Wyoming on a 115-acre tract. These locations are strategically selected to enhance connectivity and support the increasing requirements for data processing and storage. Related Digital’s forward-thinking initiatives not only address the current needs of AI and cloud industries but also anticipate future technological advancements.