Harrison Street has raised $600 million and plans to use the capital to invest in the data center market. The commitments are spread across the alternative real asset firm's HS Digital Fund and "associated vehicles," according to the company.
It's unclear what specific regions Harrison will target but Christopher Merrill, co-founder, chairman, and CEO of Harrison said that it will continue to invest in "well-connected digital assets across North America.”
According to the Chicago-based firm, it has poured $5.6 billion in carrier hotels, powered shells, dark fiber assets, and colocation sites since 2018. Additionally, it has invested in more than 6.5 million square feet worth of data centers, accounting for more than 2.1 gigawatts of capacity, and poured capital in over two dozen digital properties.
“We are excited to expand our platform in the digital assets sector and pursue a pipeline of digital asset investments supported by surging data consumption," Michael Hochanadel, managing director and head of digital for Harrison, said.
"With our strong partnerships with top-tier operators and developers, our deep understanding of the evolving primary and secondary markets, and the confidence investors place in our platform, we feel we are well positioned to capitalize on the investment opportunities ahead.”
As the investment manager looks to capitalize further on the data center opportunity, it will be joining competition from large tech firms, which have recently poured billions into the space. This includes EDGNEX Data Centers by DAMAC's $20 billion investment that will consist of existing data centers and platforms, which was announced by the Dubai-based firm this month. That will mark the company's first time in the US market, and there is a chance that the original investment number could double.
Also, this year, Amazon's Web Services unit said it would pour a projected $11 billion into artificial intelligence infrastructure and cloud computing in Georgia to expand its data center presence. It's expected to create 550 new jobs.
And Meta late in 2024, said it would build a $10 billion artificial intelligence data center in Richland Parish, Louisiana. That marks one of the state's largest-ever private investments received.
Plus, Blackstone acquired a power plant for about $1 billion that's near Virginia data centers on Thursday.
Since 2021, thanks to the demand for cloud storage and artificial intelligence, the data center space has more than doubled in size, according to Harrison
The company admitted that energy limitations are limiting supply, which is leading to 15 percent annual rent growth in the sector.