Blackstone’s QTS to Refinance Five Data Centers for $870M

Hyperscale Financing Accelerates

Commercial Property Executive reports that Blackstone’s QTS Data Centers is lining up an $870M refinancing package for five hyperscale data centers in Phoenix, Dallas-Fort Worth, and Richmond. The transaction is expected to close July 1, 2026. This proposed financing involves issuing up to $715M in fixed-rate notes and a floating-rate tranche of up to $155M, a scale reflecting the intensity of capital flows toward data center assets in growth markets.

This isn’t QTS’s first large-ticket refi this year— in March, the company locked in $510M in ABS financing for similar assets, and a $1.3B CMBS transaction is underway in New Albany, Ohio. Blackstone’s sustained investment signals ongoing CRE capital appetite for stabilized digital infrastructure portfolios.

The Details

The portfolio securing this refinancing totals 1.5M SF and 181.5 megawatts of capacity, with all assets fully leased. The five facilities stretch across three US hubs: three buildings (PHX2DC2, PHX2DC3, PHX2DC5) at the Phoenix 2 campus delivered in 2024, the still-under-construction RIC2DC3 at QTS’s Richmond campus, and DFW1DC4 in Irving, Texas—part of a six-building mega-campus. All three markets are major nodes for data center demand driven by cloud providers and network carriers.

The campuses are anchored by three investment grade-rated tenants plus three smaller carriers. The largest tenant occupies three properties and accounts for over half (57%) of the total critical IT load, with a weighted average lease term near 14 years. These long leases enhance the portfolio’s stability, a key factor for lenders.

Data Center Debt Market Remains Active

Data center assets continue to attract large debt deals as owners seek liquidity for reinvestment. QTS operates 90 properties with 5 gigawatts of capacity. The company has tapped ABS and CMBS markets several times this year. Phoenix and Richmond appeared in recent financings and the current deal. This pattern shows investors favor repeatable, institutional-grade assets. Fitch’s role as rating agency also suggests strong demand for the new securities.

This financing wave aligns with record data center absorption. US primary markets now report historically low vacancy rates. Meanwhile, hyperscale demand keeps rising. According to CBRE, Phoenix and Dallas-Fort Worth could absorb 750MW of new capacity this year.

Why It Matters

QTS’s refinancing effort shows how institutional investors value stabilized digital infrastructure. The five campuses span 1.5M SF and provide nearly 182MW of capacity. They rank among the largest assets by scale, credit quality, and lease terms. Investment-grade tenants, annual repayments, and ample power supplies strengthen the portfolio. These factors help explain broad lender interest. Fitch’s presale review and support from KeyBank and TD Securities further highlight strong capital market demand.

More broadly, QTS and Blackstone continue shifting CRE capital toward digital infrastructure. Cloud migration, AI demand, and scarce land and power support this trend. Investors have increasingly targeted digital assets worldwide as demand for computing capacity expands. For developers and investors, QTS’s use of ABS and CMBS financing confirms data centers’ growing appeal. The sector stands out as office, retail, and other property types face cautious capital markets.

What’s Next

The $870M refinancing is slated to close July 1, 2026, providing QTS with additional balance sheet flexibility. Expectations are that proceeds will pay down existing obligations and support general corporate activities, including reserve funding and new development. With Blackstone signaling continued expansion, and leasing fundamentals firm, look for QTS to keep returning to capital markets—especially as Phoenix, Dallas, and Richmond ramp up supply pipelines over the next 12–18 months. Watch for further large-scale refis as industry absorption and tenant pre-leasing continue to accelerate.