Data Center
A data center is a specialized commercial property containing networking and computing equipment, with dedicated power, cooling, and connectivity infrastructure. Data centers have emerged as one of the fastest-growing CRE asset classes driven by AI and cloud computing demand.
What it means
Data centers range from single-tenant hyperscale facilities (Amazon, Microsoft, Google) to multi-tenant colocation buildings. Power capacity (measured in megawatts) is typically the constraining resource. Major markets include Northern Virginia (the largest), Phoenix, Dallas, Silicon Valley, and emerging markets with available power (Ohio, Georgia).
Leases are typically long-term (10–15 years) with triple net structure and power-pass-through. Cap rates compressed meaningfully through the 2020s as AI compute demand accelerated. Major public data center REITs include Digital Realty and Equinix.
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