Ryan Sullivan, executive vice president and national data center group leader at Lincoln Property Co., discusses the evolving landscape of data center investments and how it compares to other alternative asset classes in terms of risk and return. He highlights how data centers have emerged as a core institutional asset class, offering high, steady returns driven by long-term leases, low tenant turnover, and strong demand fundamentals.
In the interview, Sullivan explores the factors differentiating data centers from traditional real estate and infrastructure investments, explaining how lease structures and operational services impact classification. Sullivan also delves into the increasing institutional investment in data centers, citing their resilience to economic downturns and the high barriers to entry due to capital intensity and specialized expertise.
He addresses key challenges for investors, including high upfront costs, the need for tenant pre-leasing, and the
