Hut 8 told the SEC on 20 July that it had signed a second 15-year lease at Beacon Point, its data centre campus in Nueces County, Texas: $9.8 billion of base-term contract value for 352 MW of IT capacity, on substantially the same terms as the first.
That completes the campus. It also produced three different headline numbers across the coverage, all of them accurate and none of them interchangeable. The filing gives enough detail to compute the figure that actually matters — what the tenant pays per kilowatt — so we did.
Three numbers, three different things
| Figure | What it actually covers | Where it comes from |
|---|---|---|
| $9.8bn | One 15-year lease, 352 MW of IT capacity | The Phase 2 agreement announced 20 July |
| $19.6bn | Both leases — the full 1,000 MW campus, base term only | Phase 1 (6 May) plus Phase 2 |
| $50.2bn | Campus value if all six renewal options are exercised | Three 5-year options per lease, none exercised |
All three appeared in coverage of the same announcement. They are not alternative estimates of one quantity — they describe three different things, and only the first two are contracted.
The $50.2 billion figure assumes all six renewal options are exercised. None has been. It belongs in a sentence about potential, never in one about contracted revenue.
What the tenant actually pays
Hut 8 does not publish a rent per kilowatt, but it discloses everything needed to derive one: a $9.8 billion base term, a 3.0% annual base rent escalator, a 15-year term and 352 MW of IT capacity. Solve that as a growing annuity and the rent falls out.
| Basis | Annual rent | Per kW of IT capacity, per month |
|---|---|---|
| Year 1 | $526.9m | $124.74 |
| Year 8 (midpoint) | $648.0m | $153.41 |
| Year 15 | $797.0m | $188.68 |
| Flat average across the term | $653.3m | $154.67 |
Derived from the disclosed $9.8bn base-term value and the disclosed 3.0% annual escalator, solved as a growing annuity over 180 months against 352 MW of IT capacity. Hut 8 does not publish a per-kW rate; this is our computation, not its disclosure.
Year one is roughly $124.74 per kW per month, rising to $188.68 by year fifteen — a 1.51× increase over the term, which is simply what a 3% escalator compounds to over fourteen years. Quoting the flat average of $154.67 describes neither end of the lease.
One check that the reading is right: our computed simple average of $653.3 million a year sits within $1.7 million of the $655 million average annual NOI Hut 8 states it expects upon stabilisation. On a triple-net lease those two figures should nearly coincide, and they do.
The denominator that changes everything
The filing is careful to distinguish IT capacity from utility capacity: 352 MW of the former "supported by 500 MW of utility capacity". Across the campus the ratio holds at 704 MW IT against 1,000 MW utility, and across the portfolio at 949 MW against 1,330 MW.
| Denominator used | Capacity | Implied average $/kW/month |
|---|---|---|
| IT capacity (correct) | 352 MW | $154.67 |
| Utility capacity | 500 MW | $108.89 |
The filing gives both: 352 MW of IT capacity "supported by 500 MW of utility capacity". Dividing by the larger number understates the rate by 29.6% — the single easiest way to misread this deal.
Dividing by utility capacity produces $108.89 rather than $154.67 — a rate 29.6% lower, describing a materially cheaper deal than the one signed. Any per-MW comparison between operators is worthless unless both sides use the same denominator, and the two are not usually labelled as clearly as they are here.
The same deal, signed twice
| Phase 1 | Phase 2 | |
|---|---|---|
| Announced | 6 May 2026 | 20 July 2026 |
| Term | 15 years | 15 years |
| Base-term value | $9.8bn | $9.8bn |
| IT capacity | 352 MW | 352 MW |
| Tenant | High-investment-grade, unnamed | The Phase 1 tenant |
| Structure | Triple net, described as take-or-pay | Triple net, "substantially the same terms" |
The same deal signed twice. The one wording that does not carry across is take-or-pay, which appears in the May release and not in July.
Phase 2 is Phase 1 again: same term, same value, same capacity, same counterparty. That symmetry is what makes the campus arithmetic clean, and it is also where the one disclosure gap sits.
The May release describes the Phase 1 lease as triple-net and take-or-pay. The July release says Phase 2 is triple-net on "substantially the same terms" and does not repeat the take-or-pay language. That may be nothing more than a shorter press release. It is a material term — take-or-pay is what makes contracted revenue insensitive to whether the tenant uses the capacity — and we have not assumed it applies to Phase 2.
One tenant, three quarters of the portfolio
Both leases are with the same high-investment-grade company, which Hut 8 does not name. That means the entire 1,000 MW campus — $19.6 billion of base-term value — rests on one counterparty.
Scale it against the rest of the business: Beacon Point's 704 MW of IT capacity is 74.2% of Hut 8's stated 949 MW portfolio. Concentration of that order is not unusual for hyperscale build-to-suit, and an investment-grade tenant on a fifteen-year triple-net lease is close to the best version of it. But it is the single fact that most changes the risk of every number in this article, and it is the one the filing discloses least about.
Nothing is earning yet
| When | Milestone |
|---|---|
| Now | Site preparation under way; long-lead critical equipment procured |
| Q1 2027 | Initial energisation |
| Q2 2028 | First Phase 2 data hall delivered |
| 2041 | End of the Phase 2 base term |
Contracted revenue begins when capacity is delivered, not when the lease is signed. The first Phase 2 hall is roughly two years out.
The lease is signed; the capacity is not built. Site preparation is under way and long-lead equipment is procured, but initial energisation is scheduled for Q1 2027 and the first Phase 2 data hall for Q2 2028. The $655 million average annual NOI Hut 8 cites is explicitly "upon stabilisation" — a state roughly two years away for this phase.
Fifteen years quoted as one number
A contract value is a sum of payments stretching to 2041. It is not money the company has, and the last dollar of it arrives fifteen years from now.
| Discount rate | Present value of the base term | Share of the headline |
|---|---|---|
| 7% | $5.73bn | 59% |
| 9% | $5.03bn | 51% |
| 11% | $4.44bn | 45% |
A 15-year revenue stream quoted as one number is quoted at its undiscounted sum. At a 9% cost of capital, roughly half the headline is the time value of waiting for it.
At a 9% cost of capital the $9.8 billion base term is worth about $5.03 billion today. That is still a large number and the lease is still a good one; it is simply half the size of the one in the headline.
What to watch next
- Whether take-or-pay is confirmed for Phase 2. The 10-Q or a subsequent filing should settle whether the omission was editorial or substantive.
- Any disclosure of the tenant. Counterparty identity would let the market price the concentration properly; until then "high-investment-grade" is the company's own assessment.
- Q1 2027 energisation. Slippage moves the entire revenue schedule to the right, and the base term does not extend to compensate.
- Whether the campus stays at 1,000 MW. Portfolio capacity is 1,330 MW of utility supply against 949 MW of IT; the gap is where further leases would come from.
The caveats that matter
- The tenant is not named. The filing describes only "a high-investment-grade company" that is also the Phase 1 tenant. Counterparty quality is asserted, not disclosed, and every figure here depends on it paying for fifteen years.
- Our per-kW rate is derived, not disclosed. Hut 8 publishes the term, the value, the escalator and the capacity. The rent per kilowatt is our arithmetic on those four figures, and it assumes the escalator applies uniformly from year one.
- "Take-or-pay" appears for Phase 1 but not Phase 2. The May release describing the first lease used that language; the July release says only that Phase 2 is on "substantially the same terms". We have not treated Phase 2 as take-or-pay.
- Capacity is contracted, not built. Initial energisation is scheduled for Q1 2027 and the first Phase 2 data hall for Q2 2028. Nothing in this lease is generating revenue yet.
- Concentration is our framing, not a disclosed risk factor. The 74.2% share is computed from Hut 8's own capacity figures; the company does not present it that way.
- The discount rates are ours. 7%, 9% and 11% are illustrative. Hut 8 publishes no cost-of-capital assumption and we have not attributed one to it.
Key takeaways
- What was signed. A second 15-year, $9.8bn lease for 352 MW of IT capacity, filed with the SEC on 20 July, completing the 1,000 MW campus.
- The implied rent. About $124.74 per kW per month in year one, reaching $188.68 in year fifteen under the disclosed 3% escalator.
- Check the denominator. Using utility MW instead of IT MW understates the rate by 29.6%.
- Check which headline. $9.8bn is one lease, $19.6bn is the campus, $50.2bn assumes six unexercised options.
- One tenant. Both leases are with the same unnamed counterparty, and the campus is 74.2% of portfolio IT capacity.
- Discount it. The base term is worth roughly half its headline in present-value terms at a 9% discount rate.
View author profile → · Editorial policy
