Regional Providers See Expansion Opportunity

Data center providers that have built a strong franchise in a single city or region are raising their sights and launching expansions, as seen in this week's headlines.

Data center providers that have built a strong franchise in a single city or region are raising their sights and launching expansions, as seen in this week's headlines. The moves highlight the growing opportunity for regional colocation companies to pursue gradual growth by executing on their business model and then adding markets. Significantly, this strategy is getting a vote of confidence from lenders and investors, who are providing the expansion funding in a tight capital market.

Here's a quick recap of this week's activity:

  1. Cyrus One announced a $150 million senior credit facility, which will allow the high-density colocation specialist to continue to add new facilities in core Texas market, which now includes Dallas and Austin as well as its home city of Houston.
  2. Horizon Data Center Solutions of Dallas has raised $7.5 million in equity funding from Ballast Point Ventures, and will use the money to open new data centers in Virginia and Los Angeles.
  3. American Internet Solutions, which has previously focused on the San Diego market, has opened a new facility Phoenix. The company says the new site is the first step in a multi-year, multi-city expansion.
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