Nareit's REIT Report Podcast
A show about the latest news and developments in REITs and real estate investment. All episodes feature informative and timely interviews with REIT and publicly traded real estate executives, analysts, industry professionals, and thought leaders.
Nareit's REIT Report Podcast
Barclay’s Brendan Lynch on Data Center REITs’ Extended Growth Opportunity Amid AI Demand
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Brendan Lynch, co-head of U.S. equity REIT research at Barclays, discussed data center REITs on the latest REIT Report episode, noting that the sector is rebounding as enterprise AI demand accelerates, leasing pipelines grow, and investors seek more direct exposure.
Lynch said the recent Blackstone Digital Infrastructure Trust (NYSE: BXDC) IPO shows “there are investors who are looking for a specific type of exposure,” in the data center sector, notably stabilized assets.
Meanwhile, record demand should support revenue growth, margin expansion, and cash flow growth as operators scale, he said. Development yields have improved from 6% to 7% in 2021–2022 to low double digits and, in some cases, the mid-teens, although customers’ ability to self-build limits the upside.
Power remains a key constraint, Lynch observed, but operators are getting more creative through retrofits, grid solutions, and behind-the-meter options. On regulatory pushback, “a lot of the things that are the cause of NIMBYism, I think, are misunderstandings about how data centers can fit into a given environment," he said.
Chapters:
00:00 AI CapEx Runway
00:39 Welcome to REIT Report
00:58 Data Center REIT Comeback
02:39 Leasing Pipelines Growth
03:08 Development Yields Shift
04:28 Power Constraints Markets
05:38 Creative Power Solutions
06:06 NIMBY Pushback Regulation
07:41 Winners Ecosystem Pricing
08:49 Is Now Good Entry
09:53 Data Centers in Space
10:53 Wrap Up Subscribe