CMBS Weekly: Rack to the past

Research evidence excerpt

CMBS Weekly: Rack to the past

Chong Sin AC (1-212) 834-2611 Eli Khaim (1-212) 622-0388 North America Securitized J P M O R G A Nchong.c.sin@jpmorgan.com eli.khaim@jpmorgan.com Products Research

J.P. Morgan Securities LLC J.P. Morgan Securities LLC

Terrell Bobb (1-212) 834-5947 31 July 2026

terrell.bobb@jpmchase.com

J.P. Morgan Securities LLC

CMBS Weekly

Rack to the past

• AI angst continued to drive headlines this past week, leading to a widening in hyperscal-

er and data center credit. SASB data center bonds, in comparison, held in better but on

limited trading volumes

• This angst goes back to the concerns about whether all the AI capex spending will pay

off. The reality is that the residual value question at the infrastructure and GPU/chip

layers has largely been sidestepped as so much of the financing has been underwritten

to IG hyperscaler/company contracted cashflows. The sheer concentration combined

with monetization anxiety is understandably a recipe for the sagging sentiment

• We run a stress test on outstanding SASB data center deals to the pre-AI zeitgeist basis

to see where implied LTVs land

• So, what’s the playbook for CMBS data center investors navigating the recent AI-angst

related volatility in hyperscale equity and related debt? Stick with diversified exposures,

including those that have enterprise colocation tenancy or hyperscale data centers that

are struck to a reasonable basis with strong tenancy and durable leases in primary or

secondary markets

• We continue to maintain our AAA bias in SASB data centers, though we are weary of

some of the more recently issued highly leveraged deals

• In our previous publication, we decomposed the roughly $19.4bn in paydowns experi-

enced by 92 outstanding SASB portfolio deals.