At a glance
- Rents carry a premium while very little new space goes up in the same places, which suggests the constraint on building near a data-center concentration is something other than tenant demand.
- For an allocator underwriting an industrial acquisition, the two figures work as rent benchmarks.
- An owner of existing space near a concentration gets a second read from the same finding: little new building nearby implies little new competition for tenants.
Industrial space near data-center concentrations rents 6.8% higher, and warehouses within about two miles of 21 or more data centers earn a 9.8% premium, according to CBRE.
Almost no new industrial supply is being built near those clusters, CBRE says. Rents carry a premium while very little new space goes up in the same places, which suggests the constraint on building near a data-center concentration is something other than tenant demand.
For an allocator underwriting an industrial acquisition, the two figures work as rent benchmarks. The 3-point gap between the tiers is the part an appraiser has to judge: whether proximity inside a cluster is worth capitalizing in the rent roll. When a sponsor's rent roll shows no such spread against comparable space, that is the first question for an investment committee.
An owner of existing space near a concentration gets a second read from the same finding: little new building nearby implies little new competition for tenants.
The 9.8% tier rests on a threshold an appraiser can verify: 21 or more data centers within about two miles. That makes the premium testable rather than a rule of thumb. The count either clears the threshold or it does not.
On the debt side, CREFC's primer cites $116 billion in data center project bonds. Its second edition adds securitization and secured project bonds to the January primer, IREI reported Nov. 10. The two categories give the debt behind data-center projects a name, and the $116 billion gives the name a size.
That pairing suggests data-center exposure has a second route into a portfolio: industrial rent rolls within a couple of miles of a cluster, not only direct investment in the buildings themselves.
The numbers describe one trade from opposite ends of the capital stack: rent premiums on the warehouses beside the clusters, and project bonds behind the clusters themselves. An industrial buyer now has a CBRE figure to test a rent roll against, and a debt buyer has a CREFC total to compare with other project lending.
Reported by The Wrap desk from CBRE, CREFC and IREI. Published . Corrections