The surge in data center construction is a defining trend of the AI era.
In the third part of the Insights series on data centers, CRA’s Tiago Duarte-Silva, Ana Balcárcel, and Keith Czerney examine facilities backed by ABS issuance to explore relevant factors for valuing data center portfolios.
Highlights from their analysis include the following insights:
- Annualized adjusted base rent (AABR) is highly correlated with a data center portfolio’s appraised value
- A data center portfolios’ AABR per kW varies with data center size, tenant concentration, tenant credit quality, and data center location
- Valuation assumptions today could lead to disputes tomorrow
Potential litigation risks that may give rise to future disputes if actual performance falls short of projected expectations are also explored.
Read the full overview of data center valuations and potential disputes here.
