Target Hospitality Corp. has begun construction of a second 400‑bed expansion to its existing 250‑bed data‑center workforce community in The Woodlands, Texas. The new development will bring the total capacity to 1,050 beds, a 320 % increase from the original size, and is slated for completion in June 2026.
The expansion is backed by a $49 million minimum‑revenue contract that will run for two years, from June 2026 to May 2028, and includes four one‑year extension options that could extend services through May 2032. With the new expansion, the company’s total committed minimum revenue for the data‑center community rises to more than $130 million—over three times the original $43 million contract value—underscoring the scale of the opportunity and the firm’s ability to secure long‑term, revenue‑guaranteed contracts.
Target Hospitality’s move into the data‑center workforce housing market reflects a deliberate shift from its traditional government‑centric portfolio toward higher‑margin commercial opportunities. The company’s owned‑asset model and integrated operations enable it to deliver turnkey solutions, while the secured contracts provide revenue stability. The expansion is expected to enhance margin contribution in the long run, although construction activities may modestly compress margins in 2026 due to the lower contribution profile of building new facilities.
"Target's rapid response to customer demand underscores the strength of our Hyper/Scale brand and speed‑to‑market execution across the data center value chain," said Brad Archer, President and CEO. Archer added, "We are excited to support the rapid growth in our customers' demand and provide vital solutions that contribute to the success of this data center project." He also noted that the community’s 160 % growth in three months exceeded expectations, highlighting the company’s ability to scale quickly in high‑growth markets, and that the expansion reflects accelerating demand for customized workforce accommodations essential to the data‑center industry.
Stifel reiterated a "Buy" rating for Target Hospitality and maintained a $11.00 price target, citing the company as an underappreciated play on the U.S. data‑center boom. The analyst view highlights the strategic importance of the expansion and the confidence in the company’s ability to capture a growing market segment.
The new 400‑bed community positions Target Hospitality to capitalize on the AI and data‑center boom, providing a stable, long‑term revenue stream while reinforcing its transition to higher‑margin commercial operations. The expansion demonstrates the company’s execution capability and its readiness to meet the rising demand for specialized workforce accommodations in the data‑center sector.
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