AI data center boom is leaving landlords behind

The article reports that soaring demand for AI computing has prompted large infrastructure plans, yet public data center REITs have lagged in market performance as structural payout rules, capital limits, competition and power constraints limit their participation.

The AI data center boom has driven major announcements of new computing capacity and large infrastructure programs by big technology firms. The article reports that, despite strong demand, public data center real estate investment trusts (REITs) have not captured the anticipated gains. The article mentions Equinix, Digital Realty and Iron Mountain as examples of REIT landlords whose shares have trailed broader markets. Analysts cited in the piece point to the REIT payout rules, limited leverage, power constraints and growing competition from private developers and tech companies as key reasons. Key points: - The article says major tech firms have announced large AI infrastructure builds, increasing demand for data centers. - The article mentions Equinix, Digital Realty and Iron Mountain and reports their share prices fell about 13%, 11% and 16% over the past year while the S&P 500 rose about 17%. - Analysts noted the REIT structure requires large dividend payouts and commonly limits leverage, leaving less capital for large upfront investments. - The article reports that private developers, hyperscalers and investment-backed firms won many top 2025 data center contracts, reducing opportunities for public REITs. - The article identifies operational challenges including power-grid bottlenecks, frequent construction delays and contract provisions such as early termination clauses. Summary: The article frames a gap between rising AI infrastructure demand and the ability of public data center REITs to meet it, driven by structural payout rules, lower risk tolerance and resource constraints. It also notes that some companies and REITs are shifting strategies or expanding offerings, and that private builders and tech firms have recently won large contracts. Undetermined at this time.