Capacity Reservation

A capacity reservation is a contractual right for a tenant to hold future data center power and space for a fee before it is delivered. Reservations let hyperscalers and AI tenants lock multi-megawatt blocks in phased campuses, typically with a deposit, a defined expansion schedule, and conversion into a lease at a pre-agreed price per kW. Operators use them to finance construction and signal pre-leasing, while tenants gain priority over spot demand. Terms vary: some are take-or-pay from signing, others lapse if the tenant does not convert within 6 to 18 months. Unexercised reservations can inflate reported pipeline, so analysts distinguish them from signed leases when estimating absorption and vacancy.