Fermi REIT's Growth Hinges on Single Amarillo Data Center Project
Fermi (FRMI) concentrates expansion in Project Matador, an Amarillo campus targeting 11 GW capacity and 18 million square feet of AI data center space. The single-asset dependency, combined with execution risk and governance concerns, creates a steep discount to fair value.
Fermi (FRMI) is pursuing a power-first, off-grid data center REIT strategy built almost entirely around Project Matador, a single campus in Amarillo, Texas designed to deliver 11 gigawatts of capacity and 18 million square feet of AI-optimized data center space. The project positions the REIT to serve hyperscalers chasing electricity for training and inference workloads, but leaves investors exposed to the execution timeline and lease-up of one asset.
The company has adopted an unconventional model: securing power generation and transmission rights before constructing buildings, a reversal of traditional data center development that seeks to solve the industry's most binding constraint. Management frames the approach as a hedge against grid bottlenecks that have delayed competing projects in Northern Virginia and Phoenix, though it introduces permitting, interconnection, and capital-intensity risks that diversified peers do not face.
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