Interested Investors Overwhelm the Market for Data Center Properties
Lots of capital is targeting the data center sector. But there are not enough deals to go around.
January 4, 2021 | Bendix Anderson | Wealth Management Real Estate
Data centers as an asset class have thrived under the COVID-19 pandemic. All those Zoom calls and online transactions generate data that needs to be stored, increasing the need for data center properties.
That’s led more capital of all sources to target the sector for allocations. Recent high-profile examples include Goldman Sachs Group’s infrastructure arm agreeing to invest an initial $500 million in Global Compute Infrastructure LP, a new venture targeting the sector, as well as Blackstone Group Inc. acquiring a roughly 90 percent interest in the real estate for eight single-tenant centers in Northern Virginia.
The problem is that the data center market remains supply-constrained, making it difficult amid fierce competition to close deals.
