Target Hospitality Corp. ("Target Hospitality", "Target" or the "Company") (NASDAQ:TH), one of North America's largest providers of vertically integrated modular accommodations and value-added hospitality services, today announced a multi-year lease and services agreement ("Data Center Community Contract") to construct and provide comprehensive facility services and hospitality solutions supporting the development of a regional data center campus located in the Southwestern United States ("Data Center Community" or the "Community").
Target will construct and provide full turnkey support for the Data Center Community, including premium culinary offerings, facilities management, and comprehensive support services. The purpose-built and highly customized Community will support an initial population of 250 individuals, with the capability to expand to approximately 1,500 individuals. Target anticipates first occupancy by late 2025 and potential Community expansions to meet growing customer demand in future years.
The Data Center Community Contract, which has an initial term through September 2027, is expected to generate approximately $43 million of committed minimum revenue over its initial term. The Company anticipates approximately $5 million of revenue will be realized in 2025.
The Company will utilize a portion of its existing asset portfolio to construct the premium Data Center Community, resulting in a minimal net capital investment of approximately $6 to $9 million in 2025. This decision will further enhance economic returns, while simultaneously supporting the Company's financial flexibility and capacity to quickly react to other value-enhancing growth opportunities as they arise.
This agreement highlights Target's capability to deliver comprehensive turnkey solutions across diverse commercial end-markets, and with over $1 trillion in committed technology infrastructure investments announced since January 2025, the Company believes there are meaningful opportunities to capitalize on this historic domestic investment cycle.