Target Hospitality Secures $550M Deal for Data Center Campus

By Chris Stiles • Wednesday, April 01 12:00 • Permanent Link

Target Hospitality said it secured a multi-year lease and services agreement worth more than $550 million in committed minimum revenue to support a data center campus in North Texas for a top-five hyperscaler.

The contract covers construction and facility and hospitality services for a purpose-built community designed for about 4,000 people. Construction starts immediately. First occupancy is expected in the third quarter of 2026, and full completion is targeted for the second quarter of 2027.

The initial term runs about five years, through the first quarter of 2031, with two additional two-year extension options that could extend service through January 2035. In addition to the committed minimum revenue, Target said the deal could generate about $20 million to $40 million a year in variable revenue once the community is fully built and occupied.

Target said the project calls for net capital investment of about $115 million to $125 million, with roughly 80% of that spending expected in 2026. The company said it will use a significant portion of its existing assets, plus new assets tailored to the customer’s specifications.

The contract prompted Target to raise its 2026 outlook. It now expects: Revenue of $360 million to $370 million Adjusted EBITDA of $70 million to $80 million * Capital expenditures of $220 million to $240 million, excluding acquisitions

Target said about $130 million to $140 million of that capital spending is tied to recently announced workforce hospitality services contract awards and expansions, including the data center hub.

The company also said that as recent contract awards ramp through 2026 and the data center hub is built out by mid-2027, it expects revenue and adjusted EBITDA to rise through 2026 and into 2027. By mid-2027, Target said it expects annualized revenue to exceed $500 million and annualized adjusted EBITDA to top $160 million, assuming annual variable revenue from the data center contract lands at the midpoint of its range. As a result of these announcements, the company's shares have moved 0.21% on the market, and are now trading at a price of $9.69. If you want to know more, read the company's complete 8-K report here.

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