The rapid growth of AI and digital infrastructure is creating new opportunities in the commercial mortgage-backed securities (CMBS) market, even as investors become more selective about which data center assets they back. As more data center-related debt comes to market, investors are evaluating long-term fundamentals such as tenant quality, sponsor strength and the ability of facilities to remain competitive as technology evolves.
Despite wider spreads for certain data center-backed securities, Bracewell’s Sam Murphy told New Project Media that the broader “CMBS market remains relatively stable.”
Murphy added that while it’s unlikely that any pause will shift data center CMBS rates, a delay in building data centers could attract extra mezzanine debt to projects to account for longer build times.
“We’re not talking about how to price in risk for the deal collapsing. We’re talking about how to make sure it can go an extra six to 12 months to cover whatever additional regulatory scheme gets placed on them. And I think markets are well suited to do that,” he concluded.