Why data center finance is diversifying

Data center tenants are among the biggest investment grade companies in the world, making them perfect for CTLs, which typically involve long-term leases with a stable tenant that allows for higher loan-to-value ratios.

However, not all tenants or data centers are created equal, and location can impact occupier profile, significantly influencing the investment's risk and return profile for lenders.

“The highest liquidity and best pricing is for data center assets and developments within cloud regions” Jackson says.