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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesQTS’s 2019 Manassas project paired a 10-year, 24-megawatt lease with a 50/50 joint venture with Alinda Capital Partners. Alinda committed up to $500 million over five years, with QTS matching it for up to $1 billion in combined construction funding. The structure let QTS pursue a large hyperscale build while sharing construction capital and retaining development and management-fee income. QTS later left the public markets: Blackstone affiliates completed an approximately $10 billion acquisition on August 31, 2021.
Why hyperscale data centers are both an opportunity and a funding challenge
Hyperscale customers—large cloud and technology businesses that need substantial computing capacity—can lease power and data-center space at a scale that supports major campus development. A long-term lease can give a landlord a sizable contracted revenue stream and a clearer basis for planning future construction.
The challenge is timing and capital intensity. A landlord may need to fund land, buildings, power and other infrastructure well before the facility is complete and producing rent. A single large project can therefore tie up significant capital, even when a tenant has committed to a long lease. Building capacity ahead of confirmed demand also exposes the landlord to the risk that leasing takes longer than expected.
QTS’s 2019 figures show why both sides mattered. Data Center Knowledge reported 270 megawatts of net absorption in Northern Virginia in 2018, signaling strong regional demand. QTS also reported approximately $63 million of booked-but-not-billed backlog at December 31, 2018, with more than $40 million scheduled to commence in 2019. That backlog represented signed revenue not yet commenced—not revenue already being collected.
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How the Manassas lease and Alinda joint venture worked
The project and customer commitment
QTS’s Manassas project involved an 118,000-square-foot shell for a global cloud-software customer. The lease was reported as 10 years and 24 megawatts, with an estimated total investment of $240 million. The lease commitment supplied a basis for developing the site; it did not remove the need to finance construction before the facility could deliver its full economic benefit.
The funding arrangement
QTS and Alinda formed a 50/50 joint venture for the project. Alinda committed up to $500 million over five years, and QTS committed to match it, for up to $1 billion in combined construction funding. Those are ceilings over the stated period, not a claim that the entire amount was spent on Manassas or funded at once. The arrangement gave QTS a source of institutional capital for large projects while sharing construction funding with a partner.
QTS was not relying on the Manassas venture alone to finance its expansion. Data Center Knowledge reported that QTS guided to $450 million to $500 million of 2019 capital expenditures across seven campus locations, in addition to the Manassas build. The figures show why access to capital mattered: the company was pursuing multiple campus investments alongside a large hyperscale development.
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- Save valuable floor space: 12U wall mount server cabinet Dimensions: 24.25" H x21.65" W x17.72" D. MAXIMUM MOUNTING DEPTH is 14.2".
- Keep critical network equipment secure: glass door and side panels are lockable to prevent unauthorized access; Front door can be installed on either side of the front of the cabinet to satisfy your door swing orientation preference
- Easy equipment configuration: Fully adjustable mounting rails and numbered U positions, with square holes for easy equipment mounting with top and bottom punchout panels for easy cable access
- Durability: Made of high quality cold rolled steel holds up to 110lb (50kg) (Easy Assembly Required)
- PCI & HIPPA and EIA/ECA-310-E compliant
How the joint venture could improve QTS’s project economics
QTS estimated that stabilized return on invested capital (ROIC) for the Manassas project would be 12% within 24 months with the joint venture, compared with 9% before the JV structure. The company attributed part of the difference to development and management fees it could earn through its role in the venture.
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A joint venture can help a data-center landlord pursue more projects with a given pool of its own capital, while a long lease can make the project’s revenue outlook more visible. The trade-off is that the landlord shares ownership economics and works within a partner arrangement. The value depends on the funding terms, the fees and responsibilities, the lease, and whether the facility reaches the expected stabilized performance.
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What QTS reported about its broader 2019 growth plan
In a March 1, 2019 report by Data Center Knowledge, QTS CFO Jeff Berson described a near-record backlog of signed but not yet commenced revenue as materially de-risking the growth outlook. He also said the company had funded its 2019 business plan from a recent common-stock offering and was enabling future hyperscale growth through a capital-efficient structure similar to the Alinda joint venture.
The same report cited a 580-basis-point increase in adjusted EBITDA margin, 6% year-over-year growth in operating FFO per share, and a 7.3% increase in the quarterly distribution. Those are reported performance measures for the period discussed; they are not proof that the Manassas JV alone caused the changes. Data Center Knowledge also cited an approximately 4.2% current yield at the time of publication. That yield is a historical figure from 2019, not a current yield or an investment recommendation.
What happened to QTS after the 2019 plan?
Blackstone announced that its affiliates completed the acquisition of QTS on August 31, 2021, at an approximately $10 billion transaction value. Blackstone said QTS owned more than 7 million square feet of mega-scale data-center space across North America and Europe at closing. QTS CEO Chad Williams called the transaction a new chapter for the company; Blackstone senior managing directors Greg Blank and Tyler Henritze also welcomed its future under the new ownership.
As a result, QTS is no longer publicly traded as an independent listed REIT following the acquisition. The 2019 distribution and yield figures belong to QTS’s period as a public company and should not be read as current publicly traded QTS metrics.
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