Data Center Transparency, Operating Concerns Raise Alarms In CMBS Market

Data centers have become one of the fastest-growing segments of the commercial mortgage-backed securities market, with securitized loan issuance jumping from under $500 million before 2020 to $30 billion in 2025. JLL projects that figure could reach $50 billion globally in 2026. Despite the rapid growth, special servicers are raising concerns about how difficult these assets are to evaluate, citing non-disclosure agreements, rapidly evolving technology, limited transparency, and surging supply. Because few data center loans have yet reached maturity or required special servicing, the true complexity of working through these deals remains largely untested.

Our Take

The explosive growth of data center lending in the CMBS market tells two stories at once. The first is one of genuine demand, capital flowing toward an asset class tied to real infrastructure needs. The second, less discussed story is about underwriting discipline, and whether the market has kept pace with the complexity of what it is financing.

For private market investors, the details in this article deserve careful attention. According to the reporting, special servicers are already flagging concerns about transparency gaps, non-disclosure agreements, and rapidly changing technology as obstacles to properly evaluating these assets. When the people responsible for managing distressed loans say they cannot fully assess what they own, that is a signal worth taking seriously.

From an underwriting perspective, this reflects a broader pattern that tends to emerge late in a capital cycle. When an asset class grows fast enough, the pace of capital deployment can outrun the analytical frameworks needed to support it. Securitized issuance going from under $500 million before 2020 to $30 billion in 2025 is remarkable growth. The concern is not the asset class itself, but whether every dollar of that capital was deployed with the same rigor the growth story deserves.

For investors in private credit and commercial real estate, the practical takeaway is straightforward. Assets with limited transparency, structural complexity, and untested workout mechanics require a higher standard of due diligence, not a lower one. The fact that few of these loans have reached maturity yet means the market has not fully encountered its own stress points. That moment is still ahead.

In short, data centers represent a legitimate and durable long-term demand story. But durable assets still require disciplined underwriting. Patient capital wins when others have moved too fast and asked too few questions.

Source: Data Center Transparency, Operating Concerns Raise Alarms In CMBS Market — Bisnow

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