Data Center Operations Model

Revenue begins with leased capacity split between hyperscale and retail tenants, each with its own per-kW rent and lease term. The blended rent depends on the hyperscale mix percentage, and an escalator grows effective rent from the first operating year.

• Capacity arrives in two tranches: an initial phase and an optional second phase that comes online later. Each tranche ramps occupancy independently, so new capacity leases up from scratch rather than inheriting stabilized occupancy.
• Billed IT load is the sum of both tranches, and downstream calculations such as space rent and power consumption read that billed load directly. Interconnection fees add a smaller revenue line based on cross-connects per megawatt, capacity, and occupancy.

Power cost is calculated from total facility consumption, which equals billed IT load multiplied by hours in the year and the power usage effectiveness (PUE) ratio. The procurement structure splits power between a fixed PPA portion and a spot-exposed remainder, each with its own rate.

• Blended power cost is the weighted average of those two rates applied to total kilowatt-hours. Power revenue is then that cost plus a markup percentage, so a zero markup means full pass-through to tenants.
• Cross-connects generate additional revenue based on cross-connects per megawatt, capacity, and occupancy. This structure lets you see how hedging choices and spot exposure affect both cost and revenue.

Operating costs include facility opex per megawatt, property tax and insurance as a percentage of cumulative capex gated to operations, SG&A as a percentage of revenue, and repairs and maintenance booked as opex. Pre-opening G&A hits only construction years.

• Maintenance capex reserve is a separate line used for DSCR. Construction capex splits between shell and MEP fit-out, with Phase 2 adding both shell and MEP costs in its online year.
• Debt is sized as a loan-to-cost percentage of period capex, with capitalized construction interest added to the debt balance and a separate PP&E line. Principal repayment uses a running operating-year schedule with a one-year interest-only grace period.

The model tracks net operating loss carry-forwards on the income statement. NOL opening equals prior closing, NOL created is the positive portion of negative pre-tax earnings, and NOL used is limited to a percentage of positive pre-tax income.

• This calculation flows to taxable income and cash tax. Returns are measured through unlevered and levered free cash flow streams, IRRs, equity multiple, NPV, and per-megawatt unit economics.
• Exit value uses trailing NOI divided by a cap rate, with a separate EV/EBITDA cross-check not fed into IRR. Validation checks flag balance sheet balance, capacity limits, PUE minimums, DSCR covenant, EBITDA margin, and cash balance.