Meta, BlackRock, and the $13B Residual Value Guarantee

On July 28, 2026, from a Menlo Park and New York dateline, Meta and BlackRock announced a venture to develop and own a data center campus in El Paso, Texas, with 1 gigawatt of compute capacity and operations expected to begin in 2028. The release says funds managed by BlackRock will own an 80 percent interest in the venture while Meta retains the remaining 20 percent, that total development costs are approximately $14 billion, and that at financial close Meta will contribute venture land and construction-in-progress assets valued at approximately $2.3 billion while BlackRock makes a cash contribution of approximately $4.9 billion. A portion of BlackRock’s investment, the release says, will be funded with proceeds from a $12.5 billion debt financing. On the lease, the release says: “The leases have a four-year initial term with four options to extend, providing Meta with long-term flexibility over a potential 20-year term.” Mark Zuckerberg is quoted saying the partnership “allows us to move faster and at greater scale.” Larry Fink is quoted on the strength and scale of BlackRock’s combined capabilities with GIP and HPS.

Two days later Meta filed its Form 10-Q for the quarter ended June 30, 2026, and the filing states the same transaction differently. Its subsequent-event note says Meta entered an exclusivity agreement in July 2026 to co-develop the El Paso campus through a venture in which it would hold a 20 percent membership interest, subject to the execution of definitive agreements and customary closing conditions, with closing expected in the third quarter of 2026. Meta estimates it will contribute approximately $2.3 billion of held-for-sale assets net of liabilities, consisting mostly of construction in progress and land, and receive a one-time distribution of approximately $1 billion. Then the sentence the press release never uses: “We will also provide residual value guarantees with a maximum aggregate exposure of approximately $13 billion.” The filing also shows the asset was staged for this months ago. In March 2026 Meta approved a plan to dispose of data center assets with a carrying value of $1.48 billion, and as of June 30 held-for-sale assets stood at $2.03 billion net, including $1.27 billion of goodwill reclassified out of the Family of Apps segment. The two records do not conflict, but they lead with different facts. The release leads with a potential 20-year term. The filing leads with a guarantee.

Strip the names off and this is a credit tenant structure with a residual value guarantee, run at gigawatt scale. Title sits with a fund. The tenant’s committed lease term is four years, and the extensions are options rather than obligations. The residual is guaranteed back to the venture by that same tenant, and $13 billion of guarantee against approximately $14 billion of total development cost computes to roughly 93 percent of the cost of the asset. What the fund is underwriting, in economic substance, is a corporate credit exposure wearing a real estate title. That matters the moment one of these trades shows up in a comp set. A hyperscale campus that changes hands at a stated price, with a stated ownership split, is not evidence of what hyperscale campuses are worth if the seller guaranteed the residual on the way out. Read the guarantee before you read the cap rate.

The same filing shows the fuller version of the structure, and its numbers are larger. Meta holds a 20 percent membership interest in a venture entered into in October 2025 to co-develop a data center campus in Louisiana, which is the state where Meta’s Hyperion campus in Richland Parish sits, though the filing itself does not name the campus. The parties committed to fund their pro rata share of approximately $27 billion in total estimated development costs. Meta’s leases there commence in 2029 with an aggregate initial lease commitment of approximately $12.31 billion, and again each leased property carries an initial four-year term with renewal options to a total of up to 20 years. The residual value guarantee threshold is approximately $28 billion and decreases over time, which computes to about 104 percent of the estimated development cost of the campus. Meta states it is not the primary beneficiary and does not consolidate the entity. Its equity investment carries at $2.92 billion while its disclosed maximum exposure to loss is $46.03 billion, roughly 15.8 times the carried equity. The most useful line for a real estate reader is the one explaining why Meta does not consolidate: the activity determined to most significantly affect the venture’s economic performance is remarketing the campus, including negotiations with future lease tenants and individual property sales. A leasing and valuation judgment is holding up the accounting conclusion.

Build a venture-structure file from primary records rather than from press releases. The inputs are specific: the 10-Q and 10-K notes on non-marketable equity investments and variable interest entities, the subsequent-event notes, the company’s own press release, county appraisal and permit records for the site, utility and public service commission filings on the load, and the venture’s debt documents when they surface. An AI assistant reads each record and returns a cited structure memo per venture with a fixed set of fields: membership percentage, total estimated development cost, lease commencement date, initial lease term, renewal options, aggregate initial lease commitment, residual value guarantee threshold and whether it decays, the consolidation conclusion and the stated rationale for it, maximum exposure to loss, and what changed against the prior quarter. Every figure carries the filing and note it came from, and any number that appears only in a press release is tagged as a company statement rather than a filed figure.

The reviewer is the capital markets lead working with counsel, and the approval gate is explicit: no hyperscale transaction enters a comp set, and no joint venture term sheet gets countered, on a model summary alone. The same pass produces the questions a human then asks. Did the reported sale carry a residual value guarantee, and at what threshold. Does that threshold decay, and on what schedule. Is the committed term the four years in the filing or the twenty years in the release. Who holds remarketing rights, and who chooses between re-tenanting the campus and selling it in pieces. Those four answers change the character of the trade more than the headline price does.