As data center capacity ramps up considerably in coming years to meet strong demand for cloud computing, AI and enterprise workloads, the performance of data center securitizations will be at risk if tenant demand for capacity falter, according to a report by Moody’s. Also, to the extent that landlords increase capital expenditures to avoid obsolescence as their data centers age, cash flow may eventually narrow for commercial mortgage–backed securities (CMBS) and asset-backed securities (ABS). Structured finance has become a major financing tool for data centers, with more than $9 billion of issuance through the end of April 2025 ($4.6 billion from CMBS and $4.7 billion from ABS transactions).
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