Target Hospitality lands West Texas data center contract worth about $250 million
Target Hospitality said a new multi-year lease and services agreement for a West Texas data center project could generate about $250 million in revenue through August 2030.
Target Hospitality Corp. said Aug. 26, 2026, that it signed a new multi-year lease and services agreement for a top-five hyperscaler’s data center development in the Pecos region of West Texas.
The company said the agreement adds another large customer in the data center market and expands its workforce hospitality solutions portfolio. Target said the deal, together with recent contract ramps, supports a higher 2026 outlook.
Target said the community will support about 1,100 people and will be completed by modifying existing under-utilized assets. Initial occupancy is expected in the third quarter of 2026.
According to the company, the agreement is expected to generate about $250 million in revenue through August 2030. Target said the community modifications are expected to require less than $15 million in capital investment.
The Woodlands, Texas-based company said the contract diversifies its WHS contract portfolio across multiple top-five hyperscalers and could support discussions for additional community developments with the same customer. Target also said that, including this agreement, it has secured more than $1.7 billion in multi-year contract awards across its WHS segment since January 2026.
In the release, President and Chief Executive Officer Brad Archer said the contract adds another top-five hyperscaler to the company’s portfolio and highlights its speed-to-market approach. He also said the pipeline continues to exceed 20,000 beds.
Target said the midpoint of its full-year 2026 revenue outlook is being raised by 6% and the midpoint of its adjusted EBITDA outlook is being raised by 22%. The company said it expects annualized revenue to exceed $750 million and annualized adjusted EBITDA to be above $300 million exiting 2027, based entirely on its existing contract portfolio and assuming no contribution from the commercial pipeline.
The release included forward-looking statements and described adjusted EBITDA as a non-GAAP financial measure.
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