AI Infrastructure Demand & Financing Concerns - Demand for AI infrastructure continues to grow [1] - Commercial real estate investors are increasingly concerned about hyperscalers turning to private equity for funding instead of directly funding buildings [2] - Lease agreements with hyperscalers could be risky if technology changes and reduces the need for large data centers [2][3] Financial Risks & Market Dynamics - No data center exits have exceeded $45 billion, raising concerns about valuations [3] - Large technology companies with $4 trillion market capitalization are hesitant to own data center assets, questioning the financial prudence [3] - Private equity firms may be left "holding the bag" with investor money (including pension funds) bearing the risk [4] Regulatory & Public Pushback - Towns are pushing back against data centers due to concerns about electricity rates and water usage [5] - Local politics are a growing concern for the commercial real estate market regarding data centers in 2026 [6] - Chandler, Arizona voted down a new data center due to water issues, highlighting public resistance [6]
Property Play: A new red flag in the date center buildout
CNBC Television·2025-12-17 22:53