Related Cos. has launched Related Digital, a data center construction and investment platform with a near-term $45 billion development pipeline. Related Digital will specialize in digital infrastructure for artificial intelligence and cloud hyperscale technology companies.
Related Digital is initially investing $500 million in sponsor commitments toward the buildout of its development pipeline, which totals about 5 gigawatts. The new entity’s first North American data center project, located in Ontario, is a preleased 64-megawatt data center expansion that will be delivered this summer.
Also in the pipeline is a data center campus at 8080 S. Lake Shore Drive in Chicago, the former U.S. Steel South Works site along the Lake Michigan shoreline. The site is one of the largest contiguous infill waterfront properties in the country, exceeding 400 acres.
The S. Lake Shore Drive campus will include the development of the Illinois Quantum & Microelectronics Park—a 128-acre quantum research campus where PsiQuantum, a specialist in quantum computing technology, will advance its ambitions to build the world’s largest quantum computer. Related Digital will develop a data center on the north side of the property with 1 GW of capacity.
Other data center projects in the near-term Related Digital pipeline include 500-plus acres in Illinois with 1,000-plus MW capacity; 600-plus acres in Missouri with 1,200 MW capacity; and 115 acres in Wyoming with 250 MW capacity.
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To spur further growth, Related Digital is also launching a capital-raising effort in pursuit of as much as $8 billion in private capital. Morgan Stanley is advising on the first phase of the platform’s capital formation efforts, with initial capital to be committed starting in the second half of 2025.
The new platform brings with it a number of capabilities in data center development. Related Digital will undertake its own construction and engineering, steel fabrication, mechanical and building management system contracting, supply chain and materials procurement, site selection and land development, as well as entitlement and zoning. There is also a partnership with energyRe for clean power generation.
Effective immediately, Related Cos. has appointed Brent Behrman as chief investment officer of Related Digital. Behrman was previously chief sales officer at CyrusOne, a global data center developer and operator. He will work with Related Cos. CEO Jeff Blau to execute Related Digital’s growth strategy.
Data center expansion continues
Global data center capacity forecast to grow at 15 percent per year until 2027 at least, but even so that won’t be enough to meet growing demand, JLL reported. AI is a major factor in increased demand as AI applications expand across nearly all industries.
Data center development financing will see another record year in 2025, JLL also projected. In the hyperscale and colocation segments, an estimated 10 GW is anticipated to break ground globally in 2025, with 7 GW reaching completion. That is roughly $170 billion in asset value that will need either development or permanent financing in 2025.
Data center development financing is typically 65 percent to 80 percent loan-to-cost, while permanent financing is typically 65 percent to 75 percent loan-to-value, according to JLL. Historically, most financing has been originated by a few lenders, but as the deals get larger, the lending pool is slowly increasing.