A data center developer backed by institutional capital has lined up $3 billion in financing to accelerate the buildout of data centers across North America as demand from cloud and artificial intelligence companies surges.
Los Angeles–based Serverfarm closed on a credit facility from 23 institutional lenders in December. The company plans to deploy the capital across several major markets, including Houston, Atlanta and Toronto, to build out data centers that have already been leased to undisclosed AI tenants.
The funding “provides the capital foundation to accelerate our hyperscale campus development pipeline at a time when speed to market is a competitive differentiator,” said Serverfarm Chief Executive Officer Avner Papouchado, citing “unprecedented demand for high-density, AI-ready infrastructure across our strategic North American portfolio.”
Serverfarm, with 24 properties worldwide totaling about 6 million square feet based on CoStar data, is owned by Toronto-based Manulife Investment Management. In Houston, it plans to build a pre-leased data center with 500 megawatts of power on 250 acres of land bought in 2024; in Covington, Georgia, it will build a 500,000-square-foot, 60-megawatt data center; and in Toronto, it plans to expand its data center holdings at an existing campus with 4 megawatts of added power.
Serverfarm is converting older warehouse sites in favor of data centers across North America, reflecting a broader shift in industrial real estate investing as AI infrastructure attracts a growing share of institutional capital, according to CoStar National Director of U.S. Industrial Analytics Juan Arias.
Large artificial intelligence infrastructure projects are reshaping rural parts of North America, as technology firms seek sparsely populated regions with little competition for energy and access to water needed to power and cool data centers supporting AI.
That development has prompted some resident pushback, while other critics have pointed to a potential "AI bubble" caused in part by a supply and demand imbalance.
Data centers dominate
Capital targeting U.S. industrial investments fell from more than $38 billion in 2022 to about $9 billion in 2025 — the lowest level in seven years — but roughly half of all industrial fund targets announced last year were tied to data center strategies.
Recent capital raises highlight that momentum, including a $2 billion data center fund from PGIM and an oversubscribed $3 billion hyperscale fund from Digital Realty Trust. Both are targeting major U.S. markets where demand for hyperscale data centers continues to accelerate.
Those efforts add to more than 200 data center developments currently underway across the U.S., representing a 27% annual increase in projects under construction, according to CoStar data. That's five times the average pace seen between 2015 and 2019.
Projects are also getting larger, averaging more than 370,000 square feet today, compared with just over 308,000 square feet before the pandemic.
Meanwhile, broader U.S. industrial conditions continue to soften. Vacancy reached 7.6% in the first quarter of 2026, effectively stalling rent growth, which is now flat on a quarterly basis, CoStar data shows.
Industrial buying spree
Serverfarm has been an active industrial buyer over the past two years, targeting land and properties with large floor plates, substantial acreage and secured power availability to support high-density data center development without the delays typically associated with new construction.
The company will convert two industrial properties in Houston totaling 838,314 square feet that it purchased in 2024 into one data center project using proceeds from the new credit facility.
In 2025, Serverfarm acquired the 498,960-square-foot East Atlanta Logistics Center II in Covington, Georgia, from a Strategic Real Estate Partners and PGIM joint venture for $66 million.
Serverfarm plans to convert the property into a natural-gas-powered, air-cooled data center, using proceeds from the new financing.
It is also targeting ground up construction opportunities. The company in 2024 purchased 135 acres in Clarksville, Arkansas, for future development. Serverfarm also made a data center play in Virginia in September, acquiring two former office properties in Vienna.
Northern Virginia, near the data-heavy federal government in Washington, D.C., is still considered the largest market for data centers, with what real estate services firm CBRE estimates is the capacity to use nearly enough electricity to power more than 3.5 million homes.
For the record
TD Securities served as administrative agent and joint lead arranger for the financing transaction.