Target Hospitality (NASDAQ:TH) announced on Wednesday, April 1, 2026, a transformative multi-year lease and services agreement to support a "top-five" global hyperscaler in the development of a massive data center campus in North Texas.
The deal, referred to as the "Data Center Hub Contract," marks a significant strategic pivot for the company into the rapidly expanding AI infrastructure and power generation sectors.
Under the terms of the agreement, Target will provide full-turnkey construction and comprehensive hospitality services for a purpose-built community designed to house approximately 4,000 individuals.
Construction is slated to begin immediately, with the first residents expected to move in by the third quarter of 2026 and full completion scheduled for the second quarter of 2027.
The financial implications of the contract are substantial, providing a minimum of $550 million in committed revenue over an initial five-year term ending in early 2031.
The agreement includes two additional two-year extension options that could see Target managing the site through 2035.
Beyond the base commitment, the contract allows for variable revenue of $20 million to $40 million annually based on actual occupancy levels.
To fulfill the requirements, Target will deploy a mix of existing modular assets and new, highly customized units tailored to the hyperscaler's specifications.
This approach requires a net capital investment of approximately $115 million to $125 million, with roughly 80% of that spend occurring in 2026.