The capital stack for an Opportunity Zone data center

The capital stack is the ranked list of every source of money in the project, from the safest claim (senior debt) to the riskiest (common equity). In an Opportunity Zone (OZ) data center, the riskiest layer is usually equity from a Qualified Opportunity Fund (QOF), which is the only layer that earns the OZ tax benefits. A QOF is a corporation or partnership that holds at least 90% of its assets in Opportunity Zone property.⁵

The QOF usually invests through a Qualified Opportunity Zone Business (QOZB), an operating company that owns the land, building and plant. The QOZB borrows from lenders and may raise other equity. The QOF's investment in the QOZB must be stock or a partnership interest acquired at original issue solely for cash.⁵ For the rules on what counts as equity, see why Opportunity Zone investments must be equity.

A lot, and more each year. Cushman & Wakefield's 2026 Data Center Development Cost Guide puts all-in greenfield cost in the U.S. and Canada at about $8.9 million to $23.3 million per MW, excluding chips and GPUs, up an average of 21% per MW since its previous edition.³ JLL forecasts average global shell-and-core cost of $11.3 million per MW in 2026, up from $7.7 million in 2020.¹

Two pools of cost need to be kept apart. The landlord's pool covers land, sitework, the shell, the substation and the mechanical and electrical plant. The tenant's pool covers the IT fit-out. JLL reports that AI tenant fit-out can cost up to about $25 million per MW, often more than the shell and core.^1,2 Who owns each pool decides what the QOZB must fund and what counts in its tangible property tests. See data center construction costs and Opportunity Zone budgeting.

Here is a simplified example for a single-phase, 50 MW powered-and-cooled building where the tenant funds its own IT. It is illustrative only. Assume a landlord scope of $12 million per MW, inside the Cushman & Wakefield range, for a total of $600 million.

Lenders rarely fund a speculative data center at that leverage. In a market where CBRE reports more than 80% of capacity under construction in primary markets is preleased, a signed lease with a creditworthy tenant is what turns a land deal into a financeable project.¹³ Until then, the QOF equity carries the project alone.

Equity comes first, debt comes last. A typical sequence is:

1. 1.QOF equity funds site control, power studies, utility deposits, engineering and permits. This money is most at risk.
2. 2.A lease or letter of intent with a tenant sets the revenue and the delivery date.
3. 3.Preferred equity or mezzanine capital, if used, closes alongside the construction loan.
4. 4.The senior construction loan funds vertical construction, usually after the equity has been spent.
5. 5.At stabilization, permanent debt or a sale-leaseback refinances the construction loan.

The OZ rules add a constraint. Equity the QOZB holds as cash must fit inside a written working capital safe harbor plan, which lets cash be held for up to 31 months (62 months with overlapping plans) if it is designated for building tangible property in the zone, scheduled and spent substantially as planned.¹² Loan proceeds the QOZB holds as cash count as working capital too. Raising all the equity on day one, when the power date is four years away, can strain the plan. See the working capital safe harbor.

In a partnership structure, debt creates basis. An OZ investor's basis in a qualifying investment starts at zero. A partner's basis in a QOF partnership interest is increased by its allocable share of partnership liabilities, including liabilities of a lower-tier QOZB partnership, which lets investors deduct depreciation they could not otherwise use.⁸

Data centers produce a lot of depreciation. Public Law 119-21 made 100% bonus depreciation permanent for qualified property acquired after January 19, 2025, which covers MACRS property with a recovery period of 20 years or less; the 39-year building shell does not qualify.¹⁰ Debt-funded basis lets investors use those deductions early. See depreciation, bonus depreciation and Opportunity Zones.

By building in a liquidity event before the fifth anniversary. For investments made on or after January 1, 2027, the deferred gain is included in income on the earlier of a sale of the QOF interest or five years after the investment, with a 10% basis step-up (30% in a rural fund).¹¹ Investors owe real tax that year but have not sold anything.

A data center that reaches energization in year three or four and has a signed lease can often support a refinancing around year five, with proceeds distributed to investors up to their basis. That is a practical consideration, not a rule, and it depends on the lender market and on the project being on schedule. A project still waiting for power at year five has no such option, which is one more reason to choose sites with a credible power date. See the five-year deferral.

Yes, at two levels. They can invest in the QOF as a non-qualifying piece of a mixed-funds investment, which the statute treats as a separate investment with no OZ benefits.^5,9 Or they can invest directly in the QOZB alongside the QOF. The QOZB must still pass every test (70% tangible property, 50% gross income, 40% intangibles, under 5% nonqualified financial property) no matter who else owns it, and the QOF's interest in it must still be bought at original issue for cash.⁶

Sponsors comparing structures should also review Opportunity Zone fund structures and the risks of Opportunity Zone investing. Confirm the final structure with your tax adviser, because allocations of debt and depreciation between layers drive each investor's results.