Data Centers

The exponential growth of artificial intelligence, machine learning and cloud computing has catalyzed a profound expansion in the data center industry. As such technologies continue to evolve and permeate various industry sectors, the demand for robust computational infrastructure has surged, with data centers as the backbone for data-driven innovation.

Advising on billions of dollars in data center transactions annually, Simpson Thacher is unparalleled in our understanding of the data center industry with a birds-eye view across the market. As a leading law firm across digital infrastructure, real estate and many other relevant practice areas, we provide full-service advice to data center owners, operators and investors with a coordinated, multidisciplinary approach. Since 2018, our team has advised on over $100 billion in data center acquisitions and dispositions and over $35 billion in data center financings. Combining leading market knowledge with novel execution for the diverse participants in this sector, Simpson Thacher offers the tailored advice needed to handle our clients’ most important and complex matters.

We have significant experience in transactions across the full lifecycle of a data center investment—from development to stabilization and optimization, as well as financing, acquisition and disposition—which enables us to serve as a one-stop advisor to our data center clients. In an evolving landscape, our Firm excels in offering innovative solutions to address the most challenging issues.

• Acquisitions and Equity Investments: We have acted as counsel to numerous operators and investors in respect of a variety of data center acquisitions and equity investments including platform acquisitions, traditional real estate acquisitions, and joint venture arrangements (including both development and stabilized joint ventures).
• Recapitalization and Sales: We have advised clients on several significant data center recapitalizations on buy-side and sell-side, covering both development and stabilized projects.
• Pre-Development, Development and Stabilized Financing: We counsel lenders and borrowers on a wide-range of complex financing transactions throughout the investment lifecycle and have advised on financings covering all major hyperscalers giving us unique insight into the market for hyperscale leases. We specialize in structuring and executing financings tailored to the unique needs of data center operators, optimizing terms and conditions to align with their strategic objectives. Our financing experience includes:
• Project finance loans
• Real estate balance sheet financings and CMBS financings
• Real estate construction loans
• Corporate facilities (including term loans, revolvers, bridge loans, hybrid facilities and NAV/topco facilities)
• ABS financings, including the first-ever securitized financing in the data center industry
• Development revolving credit facilities
• Private placements 
• Energy & Infrastructure: As the data center industry continues to expand, operators are increasingly faced with the challenge of securing the power necessary to meet their rapidly growing energy needs. Recognizing the significance of these challenges, we stand at the forefront of developments in the energy and infrastructure sector, providing clients with guidance through changes in regulatory and market conditions that impact their businesses.

Since 2018, our team has advised on over $100 billion in data center acquisitions and dispositions and over $35 billion in data center financings, including the following notable transactions:

• Blackstone in its $7 billion joint venture with Digital Realty to develop four hyperscale data center campuses across three metro areas on two continents
• EQT and its portfolio company, EdgeConneX, in connection with a substantial minority investment in EdgeConneX by Sixth Street
• DigitalBridge Group and its portfolio company, Scala Data Centers, in connection with a $500 million structured financing round in Scala Data Centers
• Town Lane in connection with its joint venture with PowerHouse Data Centers to develop a 300 MW data center campus
• NTT Global Data Centers Americas (NTT GDCA) in connection with an investment by TC Global Investments Americas LLC, a group company of Tokyo Century, in NTT GDCA’s data center campus in Chicago, Illinois
• KKR in connection with its investment of S$1.1 billion (~US$800 million) for a 20% stake in Singtel’s regional data center business
• Apollo in its investment in the Yondr Group’s buildout of hyperscale data center facilities through Apollo-managed infrastructure funds
• KKR in the formation of Global Technical Realty, a build-to-suit and roll-up acquisition data center platform in Europe
• Leading data center owner/operator in over $2 billion of recapitalization transactions
• Blackstone in connection with the A$24 billion (US$16.1 billion) acquisition of AirTrunk, a leading Asian data center operator
• DigitalBridge Group in connection with a $6.4 billion equity investment round in Vantage Data Centers, led by investment vehicles managed by DigitalBridge and Silver Lake
• Latin America data center operator in connection with an up to US$500 million preferred equity investment by a US hedge fund
• DigitalBridge Group and IFM Investors in their $11 billion acquisition of Switch, Inc.
• Blackstone in its $10 billion acquisition of QTS Data Centers
• Stonepeak in the acquisition and $3 billion recapitalization of Cologix
• Stonepeak in connection with its $2.7 billion acquisition of Cirion, the Latin American business of Lumen Technologies, Inc.
• Stonepeak in the formation of Digital Edge, a diversified Asia Pacific data center platform
• TierPoint in the initial securitization and multiple ABS offerings of Secured Data Center Revenue Notes, totaling over $1.6 billion
• DataBank in connection with the first-ever securitization comprised solely of colocation data center revenue and in subsequent ABS offerings
• Flexential in the initial securitization and multiple ABS offerings of Secured Data Center Revenue Notes, totaling over $2.5 billion
• QTS Data Centers in numerous construction term loan facilities for the development of hyperscale build-to-suit data centers
• Vantage Data Centers in connection with the first-ever securitization of data center revenue and in subsequent ABS offerings of Secured Data Center Revenue Notes