Data Centers
Mission-critical infrastructure serving cloud computing, AI, and enterprise data processing needs globally.
Average Cap Rate
4.75%
+0.65%
Vacancy Rate
2.1%
-0.3%
Avg Rent (per kW/month)
$150.00
+4.2%
Power Growth YoY
18.5%
+3.2%
Utilization Rate
97.9%
+0.8%
AI Demand Acceleration
High
Elevated
Data as of Q4 2025 · Sources: CoStar, CBRE Research, Moody's Analytics
Market Overview
Data centers have emerged as a defining asset class in modern real estate, driven by exponential growth in cloud computing, artificial intelligence, and digital infrastructure demand. Properties leased to Equinix, Digital Realty, and specialized AI computing providers offer investors exposure to mission-critical infrastructure supporting global digital transformation. These facilities demand premium real estate characteristics including redundant power infrastructure, fiber connectivity, climate control systems, and physical security—creating significant barriers to entry and supporting premium valuations. The AI computing boom is dramatically accelerating power demand growth to 15-20%+ annually, creating supply constraints and supporting rental rate appreciation. Data center leases typically feature long terms (10-20 years), investment-grade or near-investment-grade tenants, and escalation provisions indexed to power costs. Current cap rates of 4.50-5.35% reflect the scarcity of available supply and exceptional tenant credit quality, representing among the lowest yields in commercial real estate but justified by superior tenant fundamentals and growth dynamics.
Top Tenants by Portfolio Size
| Tenant | Credit Rating | Lease Type | Units |
|---|---|---|---|
| Equinix Inc. | BBB+ | Master NNN | 847 |
| Digital Realty Trust | BBB | Master NNN | 634 |
| CoreWeave | BB+ | Long-term NNN | 284 |
| Lambda Labs | BB | NNN | 156 |
Recent Market Deals
| Tenant | Location | Cap Rate | Price | Square Feet |
|---|---|---|---|---|
| Equinix | Northern Virginia | 4.50% | $287,500,000 | 425,000 |
| Digital Realty | Silicon Valley, CA | 4.75% | $356,200,000 | 520,000 |
| CoreWeave | Phoenix, AZ | 5.15% | $124,800,000 | 185,000 |
| Regional Operator | Dallas, TX | 5.35% | $89,400,000 | 140,000 |
Market Outlook
The data center sector outlook through 2026 is exceptionally bullish, driven by structural demand from AI, cloud computing, and digital infrastructure investment. Power consumption growth rates of 15-20% annually are outpacing new supply development in most markets, creating supply constraints supporting sustained rent growth of 4-8% annually. Major cloud providers (AWS, Microsoft Azure, Google Cloud) are expanding capacity significantly to support AI infrastructure, driving unprecedented demand for wholesale data center space. Power availability constraints in mature markets are driving facility expansion into secondary markets and alternative power regions, creating development opportunities. Hyperscale operators and colocation providers are aggressively competing for prime locations with abundant power infrastructure. Capital availability remains abundant with strong institutional demand for core data center portfolios.
Key Investor Tips
Prioritize properties leased to investment-grade data center operators (Equinix, Digital Realty) with BBB or better credit ratings to ensure financial stability and consistent rent payments.
Evaluate power infrastructure capacity and redundancy; facilities with multiple utility connections, backup power systems, and fiber connectivity command premium rents and support higher utilization.
Focus on locations with abundant power infrastructure and favorable utility economics; power availability is the critical constraint limiting data center development and expansion.
Analyze tenant mix and concentration; facilities with diversified tenant bases (cloud providers, colocation customers, enterprise users) offer lower concentration risk than single-tenant assets.
Consider lease escalation structures indexed to power costs or CPI; data center rent growth typically exceeds inflation due to rising power costs and supply constraints.
Monitor AI computing demand acceleration; facilities positioned to serve GPU computing and AI training workloads are experiencing outsized demand and pricing power.
Data and analysis on this page are for informational purposes only and do not constitute investment, financial, or tax advice. Statistics may be estimated from publicly available sources and should be verified with primary data providers before use in investment decisions. Tenant information is sourced from public filings and may not reflect current conditions. Past performance does not guarantee future results.