CMBS Weekly: Data Center SASB: Moratoriums and Corp Spillover Could Offset

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CMBS Weekly: Data Center SASB: Moratoriums and Corp Spillover Could Offset

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31 Jul 2026 15:33:32 ET │ 21 pages

CMBS Weekly

Data Center SASB: Moratoriums and Corp Spillover Could Offset

CITI'S TAKE

Jeffrey Berenbaum AC

We view data center SASB CMBS as offering an attractive spread pickup, +1-212-816-8399

though investors face significant offsetting forces. A massive surge in jeffrey.s.berenbaum@citi.com

corporate data center debt issuance threatens to cause spread widening

that could spill over from the corporate market. Conversely, a growing wave Aditi Memani

of local and state-level construction moratoriums may constrain new +1212-723-9356

supply, creating scarcity value and enhancing the pricing power of existing, aditi.memani@citi.com

stabilized assets. These regulations, however, also introduce a hostile

development environment and increase refinancing risk for the sector.

Investors should also remain mindful of concentration risk, as many large

corporate bond issuers are the primary tenants in these facilities.

Corporate Market Spillover on Data Center CMBS — Corporate data center bond

spreads widened dramatically in July. A surge in IG and HY supply drove the selloff,

which has already surpassed the total for all of 2025. We see a risk that this

issuance-glut driven widening could spill over into the data center SASB market.

Data center SASBs currently offer an attractive spread pickup, but the next new

issue will reveal the full impact of the corporate market's recent volatility.

Moratoriums: A Double-Edged Sword — Proposed data center construction

moratoriums present a dual impact for existing assets. These supply constraints

create scarcity value and pricing power for high-quality, stabilized properties,

strengthening their competitive moat.