Data centers are swiftly becoming a massive pillar of the CMBS market. But as theassets enter the mainstream, special servicers — those charged with working outproblem loans on behalf of bondholders — are beginning to question how toevaluate the highly complex and at times opaque developments.

“The value is not necessarily in the real estate,” Duane Morris partner Robert Montejo said. “Most of the value in a data center is in the energy contracts, in the personal property that's inside the data center, in very concentrated tenant risk because of the number of hyperscalers and the amount of the market that they control.”

Data center contracts also include terms that are unusual in other sectors of the industry, said Montejo, who represents data center clients and special servicers. [...]

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