I Squared backs edge data center platform with up to $1B

I Squared Capital has committed up to $1 billion to Saragon, a new Phoenix-based data center operator that begins with 10 facilities bought from Cogent Fiber, a subsidiary of Cogent Communications Holdings. Connect CRE first reported the launch. The portfolio holds roughly 53 megawatts of installed power and 259,000 square feet of colocation space across nine markets.

The facilities sit in Chicago, Atlanta, Phoenix, Los Angeles, Kansas City, Baltimore, Houston, Nashville and Stockton. The geographic spread is the asset: a seller that already has power, cooling and connectivity in place across nine metros. For an operator built to serve colocation and edge workloads, buying that portfolio beats trying to build from scratch in markets where power is scarce.

Saragon's plan, according to Connect CRE, is to invest in its existing footprint, follow customer demand, and add acquisitions. The company is aimed at colocation, high-density computing and AI inference — the compute that runs trained models rather than training them. CEO Steve Orlando frames edge as the common thread. "Demand for edge capacity is accelerating across everything we do — retail, enterprise, and wholesale colocation alike — as businesses of every kind bring compute closer to their users," he told Connect CRE. "AI inference is the newest driver, but the same fundamentals power content delivery, hybrid cloud, and mission-critical enterprise workloads."

The 'up to' on that $1 billion is a ceiling, not a promise to spend the full sum. Deployment will depend on acquisition prospects and tenant demand, so the final check could land lower. That structure is standard for infrastructure equity, where capital is committed at the platform level and then put to work deal by deal. It also puts the burden on Saragon's management team to find assets worth buying at prices that make sense. The first few acquisitions will determine whether this becomes a true roll-up or a nine-market portfolio standing still.

There is a second-party view worth noting: Cogent. The seller is a communications company that decided to turn real estate into cash. For Saragon, the sale provides facilities with the hardest inputs — power and connectivity — already secured. That is the difference between buying a platform and assembling one.

At roughly 53 megawatts, Saragon is not going to contest the gigawatt-scale data center campuses that dominate the industry's headlines. Its role is different: put compute next to the users who need it. The nine-market spread, including secondary cities like Kansas City and Nashville, gives it a regional reach that a single-market operator cannot offer.

The launch is a bet that edge capacity will keep growing as businesses push compute closer to their users — the rationale Orlando cites. The capital I Squared has committed says the firm sees a path. But 'up to' also leaves room for the platform to stay small. The first acquisition will show which outcome is coming.