Dallas firm snaps up $2B construction loan for Red Oak data center build-out

DataBank has secured a substantial $2 billion construction loan to expedite the initial phase of its expansive data center campus situated in Red Oak, Texas, approximately 20 miles south of Dallas. This significant financing package, the largest in DataBank's history, will fund the construction of the first three out of eight planned data centers on the 300-acre site. These facilities, identified as DFW 9, DFW 10, and DFW 11, are slated to encompass 600,000 square feet and provide 180 megawatts of power, with DataBank reporting they are already fully leased. According to Texas Department of Licensing and Regulation permit filings and details from DataBank's press release, interior work is set to commence on two of these buildings. The DFW 10 interior build-out is estimated at $301 million with completion by January 2027, while DFW 11 additions are budgeted at $315 million for a March 2027 completion. DataBank's President and CFO, Kevin Ooley, stated that this financing, coupled with existing power commitments, will accelerate the campus's construction and delivery timelines by about 18 months, addressing critical capacity demands. MUFG Bank, a subsidiary of Tokyo-based Mitsubishi UFJ Financial Group, acted as the administrative agent, lead arranger, and sole bookrunner for the loan, with additional lenders also participating. Davis Polk provided advisory services to DataBank for this transaction. Reports also suggest MUFG Bank is arranging a separate $600 million loan for a fourth building at the campus, reportedly leased to an undisclosed hyperscaler. This development underscores North Texas's growing prominence as a data center hub, driven by AI demand, with projections indicating Texas could surpass Virginia as the largest data center market globally by 2030.