Data Center Trends and Investment Opportunities

This document is a report detailing the trends and investment opportunities within the data center sector. It outlines how data centers are increasingly recognized for their stable, long-term cash flows and growth potential, particularly driven by the rising demand for cloud services and artificial intelligence. The report highlights the significant growth in the U.S. colocation market, which doubled between 2020 and 2024, and discusses the critical factors influencing data center site selection, including access to power and network connectivity. It also examines the evolving definitions of data centers in relation to cloud and AI workloads, emphasizing the importance of power efficiency and sustainability. The report notes that while data centers have shown strong historical performance, they remain underrepresented in institutional real estate portfolios, suggesting a growing investor interest. Additionally, it addresses the challenges and opportunities associated with developing data centers in non-traditional markets and the potential for future-proofing existing facilities to meet evolving demands.