Related Digital Closes $1.6B in Financing for Michigan Oracle Campus

Related Digital just closed $1.6 billion in financing for what will become one of the largest Oracle data center campuses in the Midwest — a deal that underscores both the frenzied pace of AI infrastructure buildout and the increasingly creative geographies developers are turning to as power-constrained metros price out new capacity.

The project, located in Saline Township, Michigan — about 10 miles south of Ann Arbor — spans roughly 270 acres and will eventually house multiple data center facilities purpose-built for Oracle's cloud operations. The financing package, led by a consortium that includes Mizuho Bank, MUFG Bank, and Citizens Bank, represents one of the largest single-asset data center debt raises in a region not traditionally associated with hyperscale infrastructure.

But here's the part the press release doesn't say: this deal is less about Michigan's tech ecosystem and more about its power grid. Saline Township sits near DTE Energy's service territory, which has been aggressively courting data center operators as coastal markets like Northern Virginia and Silicon Valley face multi-year queues for new power connections. Oracle's willingness to plant a billion-dollar campus in a town of 9,000 people is a tell — the constraint isn't land or capital anymore. It's kilowatts.

Related Digital, the development arm of Related Companies, declined to specify the exact power capacity of the campus but confirmed the site is designed to support "multiple phases of development" with power commitments already secured from DTE. That's the real headline. In a market where some Northern Virginia projects are being told to wait until 2027 for grid connections, having firm power allocations in hand before breaking ground is the new currency.

Michigan isn't on anyone's shortlist of data center hubs. The state ranks outside the top 10 nationally in total data center capacity, and Saline Township — a quiet stretch of farmland and exurban residential sprawl — has exactly zero existing hyperscale facilities. So what changed?

Two things. First, DTE Energy has been remarkably aggressive in reserving transmission capacity for large industrial users, including data centers, as part of a broader economic development strategy. Unlike utilities in Virginia or Texas that are managing legacy commitments and congested substations, DTE has actively marketed itself as a power-available alternative. The utility has publicly stated it can support up to 1,000 megawatts of new data center load over the next five years — a figure that dwarfs what most Midwest utilities are willing to commit.

Second, Oracle's cloud expansion strategy has always tilted toward distributed regional campuses rather than consolidated mega-facilities. The company operates more than 40 cloud regions globally, many in secondary markets that prioritize latency reduction and regulatory compliance over proximity to Silicon Valley. A Michigan campus fits that model — close enough to Chicago, Detroit, and Toronto to serve enterprise clients across the Great Lakes corridor, far enough from saturated markets to avoid the power queue.

Still, there's skepticism. Analysts at Structure Research, a data center-focused advisory firm, have noted that non-traditional markets like Michigan face workforce challenges that coastal hubs don't. "You can build the shell and wire the racks," one analyst said in a December report, "but staffing 24/7 NOC operations in a town with limited tech talent is a different problem." Oracle and Related haven't detailed their workforce strategy for the Saline campus.

The debt package itself is notable both for its size and its structure. At $1.6 billion for a single site, it ranks among the top five largest single-asset data center financings closed in North America in the past 18 months. For context, Digital Realty's financing for its Ashburn campus expansion in 2023 totaled $1.8 billion, and that was for multiple buildings across an established portfolio.

The lender syndicate — Mizuho, MUFG, and Citizens — represents a mix of Japanese and U.S. capital, a common configuration in large infrastructure deals where Japanese banks have shown appetite for long-duration, yield-stable assets. Data center debt has historically been viewed as lower-risk infrastructure financing given the long-term lease commitments from hyperscalers, though that thesis is being tested as the market absorbs record supply growth.

Related Digital did not disclose the loan-to-cost ratio or interest rate, but industry sources familiar with recent data center financings estimate the deal likely carries a rate in the low-to-mid 6% range, consistent with other investment-grade-tenant facilities financed in late 2024 and early 2025. The tenor is likely 5-7 years, with refinancing optionality tied to project completion milestones.

What's conspicuously absent from the financing announcement: any mention of tax incentives or public subsidy. Michigan has been relatively restrained compared to states like Ohio, Indiana, and Tennessee, which have rolled out aggressive abatement packages to lure data center projects. If Related Digital and Oracle secured meaningful state or local incentives, they're not advertising it — which either means the economics work without subsidy, or the incentives are structured in a way that doesn't require public disclosure yet.

The press release confirms Oracle as the anchor tenant but provides zero detail on lease structure, term length, or take-up timeline. That's standard for these announcements, but it leaves some critical questions unanswered. Is Oracle pre-leasing the entire campus, or is Related Digital building spec capacity with Oracle as the Phase 1 tenant? How much of the $1.6 billion is allocated to shell construction versus interior fit-out, which is often tenant-funded in hyperscale deals?

Related Digital's Michigan bet is not an isolated move. It's part of a broader recalibration of where hyperscale infrastructure gets built. Over the past 24 months, developers have announced major projects in Columbus, Ohio; Omaha, Nebraska; Des Moines, Iowa; and Kenosha, Wisconsin — markets that five years ago would have been dismissed as too far from fiber hubs or too disconnected from enterprise density.

The math is simple. Northern Virginia, the largest data center market in the world, added roughly 1,200 megawatts of new capacity in 2024 alone — but Dominion Energy has publicly stated it cannot support more than 500-600 megawatts of new connections per year going forward without major transmission upgrades that won't be online until 2028. Phoenix, Silicon Valley, and parts of Dallas are facing similar bottlenecks.

Meanwhile, AI training workloads — which are far more power-intensive than traditional cloud compute — are driving demand for facilities that can deliver 50-100 megawatts of continuous load per building. That's 5-10x the power density of a typical enterprise colocation facility, and it's pushing developers into markets where utilities can still deliver that kind of capacity without multi-year delays.

Michigan's pitch is straightforward: reliable grid, proximity to Canadian hydroelectric imports via cross-border transmission, relatively low land costs, and a manufacturing-heavy economy that means the state's utilities are already set up to handle large industrial loads. DTE Energy has also been vocal about its willingness to explore on-site generation partnerships, including natural gas peaker plants and even small modular nuclear reactors, though none of those arrangements have been finalized for the Saline project.

Here's the tension no one's talking about yet: if Michigan, Ohio, and Indiana become the new Virginia, they'll face the same constraints Virginia is dealing with now. DTE's 1,000-megawatt commitment sounds generous until you realize that's enough for maybe 10-15 large hyperscale facilities total. If Google, AWS, Microsoft, and Meta all decide they need Midwest campuses over the next three years — and early signs suggest they do — the grid queue problem just moves geographies.

Some developers are already hedging by securing sites in even less obvious markets. There are active land searches underway in parts of Pennsylvania, upstate New York, and West Virginia — anywhere with surplus transmission capacity and utilities willing to negotiate. The Related-Oracle deal in Michigan might look pioneering in 2025. By 2027, it might just look early.

For Related Companies, this project represents a significant expansion of its data center development arm. The firm is better known for large-scale mixed-use real estate — Hudson Yards in Manhattan, luxury residential towers, urban retail — than for hyperscale infrastructure. But over the past three years, Related has quietly built out a data center platform focused on hyperscale development in partnership with anchor tenants.

The Michigan campus is Related Digital's third announced project. The firm is also developing facilities in Phoenix and Columbus, both with undisclosed hyperscale tenants. The strategy appears to be build-to-suit rather than spec development: secure the tenant commitment first, lock down power and financing, then execute. It's a lower-risk model than what some of the pure-play data center developers are doing, where they're building out capacity ahead of signed leases and banking on absorption.

What Related brings to the table is deep relationships with institutional capital and a track record of navigating complex municipal approvals — both useful when you're trying to build a 270-acre industrial campus in a township that's never seen anything larger than a Home Depot. The firm has also been hiring aggressively from the data center sector. Its data center development team now includes former executives from QTS, CyrusOne, and Digital Realty.

One open question: does Related plan to hold these assets long-term, or is this a development-and-flip strategy? The firm has historically been a merchant builder in the residential and commercial space, developing projects and then selling them to institutional owners. Data centers, with their long-duration cash flows and relatively predictable NOI, would be attractive hold assets — but they'd also command premium valuations on exit to REITs or infrastructure funds.

Oracle's cloud infrastructure strategy has always been about distributed scale rather than consolidated mega-campuses. The company operates 44 cloud regions globally as of early 2025, compared to AWS's 32 and Google Cloud's 40. Many of Oracle's regions are smaller, single-facility deployments designed to serve specific enterprise clients with latency or data sovereignty requirements.

The Michigan campus represents a different scale. At 270 acres, it's large enough to eventually support 200-300 megawatts of IT load across multiple buildings — on par with Oracle's largest U.S. cloud regions. That suggests this isn't just a regional edge facility. It's likely a core compute hub meant to serve Oracle's growing database-as-a-service and AI workload business, both of which have been growing faster than the company's overall cloud revenue.

Strip away the press release language and the Michigan deal is ultimately about AI compute capacity. Oracle has been racing to build out GPU-accelerated infrastructure to compete with AWS, Azure, and Google Cloud in the AI training and inference market. The company claims it can deliver lower-cost GPU clusters than its hyperscale peers, in part because it's building purpose-designed facilities rather than retrofitting existing data centers.

That's where power density becomes critical. AI training workloads can push 50-80 kilowatts per rack, compared to 8-12 kilowatts for traditional enterprise compute. To support that kind of density at scale, you need not just power availability but also cooling infrastructure that most existing data centers can't handle. Building greenfield in Michigan gives Oracle the chance to design for that density from day one, rather than trying to cram high-density racks into buildings designed for lower loads.

NVIDIA's latest H100 and H200 GPU clusters — which Oracle has been aggressively deploying — require liquid cooling in most configurations, another factor that favors new construction over retrofits. Whether the Michigan facility will use traditional air cooling, direct-to-chip liquid cooling, or immersion cooling hasn't been disclosed, but the scale of the project suggests Oracle is planning for future-generation chips that will push density even higher.

Related Digital and Oracle aren't the only players circling the Midwest. Here's who else has announced major projects or secured land in the region over the past 18 months:

What's striking about this list is how much of it has come online in just the past 24 months. Three years ago, the only significant Midwest data center markets were Chicago and Columbus. Now there are active developments across six states, most of them targeting hyperscale tenants rather than enterprise colocation.

The risk, of course, is oversupply. If every developer with land in Ohio or Michigan is betting that hyperscalers will need backup capacity outside of Virginia and Phoenix, and those hyperscalers ultimately consolidate into just a few Midwest campuses, someone's going to be left holding spec buildings with no tenant. That hasn't happened yet — absorption has kept pace with new supply — but it's the downside scenario that debt investors are starting to model.

The Related-Oracle financing is a signal that debt markets remain open for large, well-tenanted data center projects even as interest rates have stayed elevated. The broader data center lending environment has been mixed over the past year. Construction debt for spec projects has become harder to secure, and pricing has widened, but build-to-suit deals with investment-grade anchor tenants are still getting done at relatively attractive terms.

Japanese banks, in particular, have been among the most active data center lenders. Mizuho and MUFG have collectively participated in more than $10 billion in U.S. data center financings since 2022, often stepping in as lead arrangers when U.S. banks have pulled back. Their appetite reflects both the yield profile — data center debt typically prices 150-250 basis points over SOFR, attractive relative to other commercial real estate — and the perceived credit quality of hyperscale tenants.

Still, not all data center debt is created equal. Lenders are increasingly differentiating between projects with signed leases and those relying on absorption assumptions. A facility with Oracle locked in for 10-15 years gets priced very differently than a spec building in a secondary market with no tenant commitments. The Related deal falls squarely in the former category, which is why it cleared $1.6 billion despite being in a non-traditional geography.

One thing to watch: whether this deal leads to a wave of similar financings in the Midwest. If other developers can point to Related's Michigan success as precedent, it could unlock debt capacity for projects that might have struggled to secure financing 12 months ago. Conversely, if the project hits delays or Oracle's take-up ends up slower than projected, it could make lenders more cautious about non-traditional markets.

For all the detail in the financing announcement, there's a lot we still don't know. Construction timelines weren't disclosed — when does Phase 1 break ground, and when does Oracle take occupancy? Lease economics remain opaque: is this a triple-net structure where Oracle funds all interior build-out, or is Related delivering turnkey space?

Power specifics are also murky. DTE Energy has confirmed it can support the project, but at what cost? Data center operators in some markets are being asked to fund substation upgrades or pay demand charges that materially affect project economics. If Related and Oracle negotiated favorable power pricing or infrastructure cost-sharing, that would explain why Michigan beat out other sites — but neither party has said.

And then there's the workforce question. Saline Township has roughly 9,000 residents. Ann Arbor, 10 miles north, has a deeper labor pool thanks to the University of Michigan, but it's not a tech hub. Where do the NOC engineers, facility managers, and electricians come from? Oracle could staff remotely for some roles, but 24/7 on-site operations require bodies. If the project ends up relying heavily on out-of-state labor or extended contractor rotations, that adds cost and complexity that wasn't in the initial pro forma.

Finally: what happens to Saline Township itself? A 270-acre data center campus is a seismic shift for a community that's mostly residential and agricultural. The tax base impact will be significant, but so will the infrastructure demands. Does the township have the water capacity to support the cooling load? Can local roads handle construction traffic and ongoing logistics? Those aren't press release questions, but they're the ones that determine whether this project becomes a model or a cautionary tale.