META forms $27 billion data center joint venture with Blue Owl Capital

Meta Platforms Inc. (NASDAQ: META) entered into a joint venture agreement with funds managed by Blue Owl Capital to develop and own the Hyperion data center campus in Richland Parish, Louisiana, the company announced.

Under the agreement, Blue Owl Capital funds will hold an 80% interest in the joint venture while Meta retains 20% ownership. The parties committed to fund their respective shares of approximately $27 billion in total development costs for buildings and infrastructure at the campus.

Blue Owl Capital made a cash contribution of approximately $7 billion to the joint venture, while Meta contributed land and construction-in-progress assets previously classified as held-for-sale. Meta received a one-time distribution of approximately $3 billion from the joint venture.

Meta will provide construction management and property management services for the project and entered into operating lease agreements with the joint venture for use of all campus facilities once construction is complete. The lease agreements include a four-year initial term with extension options.

Meta also provided the joint venture with a residual value guarantee for the first 16 years of operations, under which Meta would make a capped cash payment based on the campus value if certain conditions are met following lease non-renewal or termination.

"Our AI ambitions will be realized through our ability to deliver the infrastructure to support it," said Susan Li, Meta's CFO.

Construction is underway with thousands of construction workers on site, and the project will support over 500 operational jobs once online, according to Rachel Peterson, Meta's VP of Data Centers.

A portion of Blue Owl's capital will be funded by debt issued to PIMCO and other bond investors through a private securities offering. Morgan Stanley served as exclusive financial advisor to Meta and sole bookrunner for the securities offering.

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