Data Center Debt Market Expands as Issuance Slows

The race to build data centers for artificial intelligence is reshaping commercial real estate finance, and lenders are being forced to look past the usual real estate metrics. An updated report from the CRE Finance Council outlines how the market for data center debt has grown, and why power supplies, tenant concentration and higher rates now matter as much as location.

CREFC released the second edition of its Data Center Primer, an update to its first report in January. It examines the growing use of securitization and secured project bonds, recent regulatory changes, rising borrowing costs, and the power and infrastructure limits shaping development.

As of Oct. 8, Barclays counted about $116 billion in secured project bonds outstanding in the data center sector, along with $44.2 billion in asset-backed securities and $22.4 billion in commercial mortgage-backed securities, CREFC noted in the report.

U.S. data center ABS and CMBS issuance totaled $21.9 billion through October, up 7% from a year earlier, CREFC said. But issuance over the past three months fell 20.2% from the same period in 2025 as borrowing costs climbed.

The report also covers a July interpretation by Securities and Exchange Commission staff that found certain data center ABS structures fall outside the 5% risk retention requirement. The rules for CMBS are unchanged.

“Data centers have emerged as an increasingly important segment of the financing markets,” said Paul T. Vanderslice, president and CEO of CREFC.

Raj Aidasani, CREFC’s managing director of research, said lenders must look beyond traditional real estate fundamentals.

“Power availability, infrastructure costs, tenant obligations, and refinancing assumptions can all have significant implications for a project’s economics,” he said.