US wholesale data center company QTS Realty Trust has filed for an initial public offering valued at up to US$300m with the US SEC and said that one part of the company is in preparation to become a Real Estate Investment Trust (REIT).

The company, which operates ten data centers in the US, covering 3.8m gross sq ft of space – 1.8m of this raised floor – said it will use the proceeds to repay outstanding debts accrued under its revolving credit facility and for on going data center redevelopment costs and future acquisitions.

Some of the money will also be used for general corporate purposes.

Kansas-based QTS expanded its credit facility by $135m in May this year, bringing it up to $575m to fund future developments.

The data center provider said it plans to invest between US$110m and $155 m for near term projects currently under development.

QTS first said it hoped to pursue its IPO in July this year and in its filing said it hoped to achieve REIT status for federal income tax purposes for its cloud business, which will come into play for its taxable year ending December this year.

Currently this cloud and managed services product is delivered by Quality Technology Services Holding, which is based in Delaware and owned by the company’s operating partnership.

QTS said the company may form additional REIT businesses in future.

A REIT means, however, the amount of shares given to one individual has to be restricted, with only certain designated entities owning up to 9.8% of the aggregate of outstanding shares of common stock.

A number of data center companies have had their REIT conversions put on hold while the US Internal Revenue Services investigates the move further.

Equinix has made its plans for a REIT conversion clear but the process has been delayed while the government investigates the standards for REIT status.

Equinix said it believed conversion to a REIT would cost about $50m to $80m with an additional amount of up to $10m in payments.

BofA Merril Lunch, Deutsche Bank Securities, KeyBanc Capital Markets and Morgan Stanley along with Goldman Sacks and Jefferies are acting on the IPO.

Once the IPO is complete, QTS will run under an operating partnership called Quality Tech LP, which will oversee its property holding subsidiaries and Quality Technology Holding LLC business.

The company is proposing listing on the New York Stock exchange as QTS.

QTS did not list share prices on the SEC filing, instead putting forward the $300m as a place holder.