The Economics of a 100MW Campus

There is a moment in every cycle when the narrative stops working.

For data centers, that narrative has been scale. Bigger campuses. Faster timelines. Larger commitments from hyperscalers. It has been easy to talk about megawatts as if they are abstract.

They are not.

A 100MW campus is not a headline. It is a capital structure. It is a sequence of decisions. It is a set of risks that have to clear in order for anything to be built.

So let’s walk through it.

Not as a story. As a deal.

Start with the total development cost.

For a modern AI-ready campus, you are typically looking at $8 million to $12 million per megawatt depending on design, redundancy, and cooling strategy. That puts a 100MW campus in the range of $800 million to $1.2 billion all in.

That number is not evenly distributed.

Roughly speaking, the building shell and site work might account for 15 to 20 percent. Electrical infrastructure including substations, transformers, and distribution systems can take 30 to 40 percent. Mechanical systems, especially as liquid cooling becomes more prevalent, take another 20 to 30 percent. The rest sits in land, soft costs, development fees, and contingencies.

The key insight is this.

This is not a real estate deal with a power component.

It is a power deal with a real estate wrapper.

Now move to the capital stack.

A typical structure might look like 30 to 40 percent equity and 60 to 70 percent debt, though that varies based on preleasing, sponsor strength, and power certainty.

The equity is usually a mix. A development sponsor. An infrastructure fund. Sometimes a hyperscaler taking a minority stake or providing structured capital. The debt can come from banks, private credit, or increasingly, infrastructure-focused lenders who understand long duration assets tied to contracted revenue.

But the capital stack does not close without one thing.

Revenue certainty.

That comes through the lease.

Most hyperscale or large colocation leases are structured as long term agreements, often 10 to 20 years, with fixed or escalated pricing per kilowatt. They are not traditional office leases. They are closer to infrastructure contracts.

You are not just leasing space.

You are delivering power, uptime, and performance.

Which brings us to revenue.

A stabilized wholesale data center lease might range from $120 to $180 per kilowatt per month depending on market, design, and tenant profile. At 100MW, that translates into $144 million to $216 million in annual gross revenue at full stabilization.

But that is not the number that matters.

What matters is the path to get there.

These campuses are almost always built in phases. You do not deploy 100MW on day one. You build 20MW, lease it, stabilize it, then expand. Each phase carries its own risk profile and its own capital draw.

Which means your return is a function of timing as much as pricing.

Now layer in operating costs.

Power is the dominant expense. Even in pass through structures, the cost of securing and delivering power, including backup systems and redundancy, is significant. Then you have maintenance, staffing, connectivity, and ongoing capital expenditures to maintain performance standards.

Once you net that out, you arrive at stabilized yield.

For a well executed project with strong tenancy, you might see unlevered yields in the 7 to 9 percent range. With leverage, that can translate into low to mid teens equity IRRs depending on lease-up speed, cost of capital, and exit conditions.

But those returns are not guaranteed.

They are earned through risk.

And the risks are not where most people think.

It is not just construction risk or leasing risk.

It is power risk.

Can you secure 100MW in the first place. Can you get it delivered on time. Can you price it in a way that maintains margin over a 10 to 20 year lease. Can you protect against policy shifts that change the economics of generation or transmission.

If you get the power wrong, nothing else matters.

That is why you are now seeing developers sign 20 year power agreements, co-invest in generation, or build on-site capacity to control timelines and costs. The lease and the power contract are becoming inseparable.

One underwrites the other.

Finally, think about exit.

These assets are increasingly being valued like infrastructure rather than traditional real estate. Long duration contracts. Creditworthy tenants. Predictable cash flows. That attracts a different class of capital.

Pension funds. Sovereign wealth. Infrastructure platforms.

Exit cap rates have compressed in recent years, often landing in the 5 to 7 percent range for stabilized assets with strong tenants and long lease terms. That spread between development yield and exit cap is where a significant portion of the value is created.

But only if you deliver.

And delivery, again, comes back to the same constraint.

Power.

This is the part of the story that often gets lost.

People see the buildings. The scale. The logos of the tenants.

They do not see the capital stack. They do not see the sequencing. They do not see the dependency on infrastructure that sits outside the site boundary.

A 100MW campus is not just a project.

It is a system.

And if you understand that system, you start to see why this market is separating.

The winners are not the ones who can assemble land the fastest.

They are the ones who can structure capital, secure power, lock in tenants, and manage risk across a development cycle that is measured in years and billions of dollars.

That is the level of thinking this market now requires.

And it is exactly what we unpack in Data Centers Demystified at NYU, where we focus on the physical, regulatory, and strategic inputs that determine whether a project pencils before anyone even opens the model.

If you want to move from headlines to inputs that shape the economics of a deal, this is where the work begins.

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PLUS: When you want to take this further, here are three ways I can help you think through opportunities, positioning, and how to actually participate in this space:

1. Ask me a question. ​

If you’re looking at a deal, site, or opportunity and something doesn’t fully make sense, just reply and tell me what you’re seeing. Each week, I choose a few and break them down.

2. Clarify your positioning.

If you’re trying to figure out where you actually fit in data centers and how to access real deal flow, I can help you map how your background translates into opportunities based on how the market is moving. Just reply with “Positioning.”

3. Work directly with me.

If you want help thinking through deals, evaluating opportunities, or building a clearer strategy in this space, just reply with “Work Together” and tell me a bit about what you’re working on and what you’d like to work on together, and I’ll get you all the details.