Data center boom reshapes commercial mortgage backed securities risks

For decades, the commercial mortgage backed securities market financed a fairly predictable cast of characters: office towers, shopping malls, apartment complexes. Then came the AI buildout, and the playbook went out the window. Data-center mortgages have become one of the fastest-growing segments in CMBS, transforming a market that has historically rewarded those who understood cap rates and lease rollovers into one that now demands fluency in power-grid capacity and GPU depreciation cycles. From rounding error to $30 billion The scale of the shift is striking. Securitized lending backed by data centers was below $500 million before 2020. By 2025, that figure is expected to land somewhere between $27 billion and $30 billion. JPMorgan projects the segment could reach $30 billion to $40 billion annually by 2026 and 2027, which would represent roughly 7 to 10 percent of combined CMBS and asset-backed securities issuance. A maturity wall that dwarfs the office crisis Atrium estimates that $128 billion in U.S. data-center debt comes due between 2025 and 2028. By 2029, that number climbs to $213 billion. For context, that figure exceeds the entire maturity wall facing U.S. office CMBS. ...